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UK car manufacturing slumps 45% in April on Brexit uncertainty: SMMT

London — UK car manufacturing output plummeted by almost half in April, with production down 45% year on year at 70,971 units, according to figures published Thursday by the Society of Motor Manufacturers and Traders.

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"Factory shutdowns, rescheduled to mitigate against the expected uncertainty of a March 29 Brexit, took effect in many plants across the UK," SMMT said.

April's dismal performance, the 11th straight month of decline, exacerbated the underlying downward trend, due largely to slowing demand in key international markets, including the EU, China and the US, as well as at home, the group added.

The latest figures "are evidence of the vast cost and upheaval Brexit uncertainty has already wrought on UK automotive manufacturing businesses and workers," SMMT's chief executive, Mike Hawes, said in a statement.

"Prolonged instability has done untold damage, with the fear of 'no deal' holding back progress, causing investment to stall, jobs to be lost and undermining our global reputation," he said. "This is why 'no deal' must be taken off the table immediately and permanently." Manufacturing for domestic and overseas markets fell 44% and 45%, respectively, from April 2018 levels as most volume manufacturers brought forward, and extended, production stoppages normally scheduled for the summer holiday period.

For January-April, 127,240 fewer cars were built compared with the same period in 2018 -- a decline of 22%, with similarly large percentage falls in production for the UK and export.

The shift in shutdowns, which cannot now be repeated for the new October 31 Brexit deadline, "was part of a raft of costly and ongoing contingency measures, including stockpiling, rationalisation, training for new customs procedures and rerouting of logistics -- all designed to try to protect business when the UK leaves the customs union and single market," SMMT said.

Provided the UK leaves the EU with "a favourable deal and substantial transition period," and notwithstanding any escalation of global trade tensions, the decline in volumes is expected to ease by the end of the year, as new models come on stream and production lines remain active over the usual summer shutdown months, SMMT said.

But, it added, "the latest independent outlook suggests output will still be down some 10.5% on 2018 levels." A "no deal" Brexit could exacerbate this decline, with the threat of border delays, production stoppages and additional costs compromising competitiveness, the group warned.

Commenting on the April figures, Stuart Apperley, director and head of UK automotive at Lloyds Bank Commercial Banking, suggested that "things may not be as bleak as they first appear." A significant dip in output "has always been on the cards for April as a result of the planned summer factory shutdowns being brought forward. With this in mind, we expect a clearer picture to emerge in the coming months when the impact of the shutdowns has worked its way through," Apperley said.

He added, however, that while the UK's car industry "remains particularly susceptible" to any vulnerabilities the wider economy faces, "it also has its own challenges -- from record levels of stockpiling to falling confidence affecting demand on the continent, and China's continued slump in sales."

-- Andy Blamey, andy.blamey@spglobal.com

-- Edited by James Leech, newsdesk@spglobal.com