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UK automotive production drops in April

Article By: ,  Financial Analyst
May 29, 2015 4:36 PM

After seeing a drop in exports, UK car production dropped in April.

According to the Society of Motor Manufacturers and Traders (SMMT), production was down in the month by 3.8 per cent compared to the same period last year – and while the number of cars produced for the domestic market increased by 11.1 per cent to 29,930, it was not enough to offset the 7.6 per cent drop in exports, which equalled more than 98,000 vehicles.

Chief executive at the SMMT, Mike Hawes, told the BBC that low demand in Europe was part of what hindered UK exports.

"Europe as a whole is three million units off its peak," he explained.

Speaking of the increase in domestic sales, Mr Hawes said that it was in part due to economic confidence and an interest in new models.

"The UK buyer is more confident that the average buyer across the rest of Europe," he said.

He added that the growing availability and popularity of car finance packages was also a cause for the boost in domestic sales. Around three-quarters of purchases are made with a financing package – and this is an option that's more popular in the UK than other markets.

"Brits have a greater predilection to buy on credit. These packges are attracting people into the showrooms," Mr Hawes explained.

More than half a million cars produced

Despite production being down, the UK has already produced more than half a million cars this year. By April, 530,505 new cars had been built and car manufacturers are positive about what the future holds.

"Manufacturers across the country are poised to see yet more growth following multi-billion pound investments and, providing global markets perform well, output is on track to reach record levels in the next few years," Mr Hawes added.

On Tuesday (May 26th), Jaguar Land Rover announced its fifth year of growth and five per cent in crease in pre-tax profits. The company said 80 per cent of its vehicles were sold abroad.

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