UK car production plunged in March to lowest level

UK car production plunged by more than a third in March to its lowest since 2009 as the coronavirus pandemic forced factories to close in an unprecedented crisis for the industry.

Just 78,767 vehicles left factory gates in the month, some 47,428 fewer than the same period in the previous year, according to the Society of Motor Manufacturers and Traders (SMMT), the sectors lobby group.

It was the worst March since 2009, when the global financial crisis caused demand to plunge. That contributed to the worst quarter since 2010.

The British car industry was already struggling with uncertainty over Brexit that had caused an investment freeze, on top of the global turmoil caused by weakness in Chinese sales and controversy over emissions cheating. At the same time, carmakers needed to make heavy investments in electric vehicle technology to meet new emissions rules.

The addition of the coronavirus pandemic has added yet another financial challenge. German carmakers Volkswagen and Mercedes-Benz owner Daimler reported large hits to sales on Wednesday, mirroring the travails of owners of large UK plants including Peugeot, Nissan and Jaguar Land Rover owner Tata Motors.

Mike Hawes, SMMT chief executive, said: “UK automotive is fundamentally strong but, as these figures show, it is being tested like never before, with each week of shutdown costing the sector and economy billions.

“Government emergency measures are helping keep many companies afloat and thousands of people in jobs, but liquidity remains a major concern and will become even more stretched as the industry begins to restart.

The UK industry faces a cost of £8.2bn – equivalent to a fifth of pre-crisis turnover – if plants can reopen around the middle of May, according to new forecasts by Auto Analysis, a consultancy.

March production started mostly as normal in the UK, although factory closures in China, Italy and across Europe had disrupted supply chains. However, by the end of the month the rapid spread of the coronavirus had forced every large car factory to close. April production is likely to have been the lowest for decades, given ongoing shutdowns.

Many UK carmakers are planning to return to work around the middle of May, with new physical distancing measures that range from taping off toilets and break areas to checking employees temperatures every day.

Jaguar Land Rover, the UKs biggest carmaker, plans to gradually reopen some factories on 18 May. Aston Martin Lagonda said it would reopen its factory in St Athan, south Wales, on 5 May, while fellow luxury carmaker Bentley will begin a phased restart on 11 May. Vauxhall, owned by Peugeot SA, also plans to restart production at its Ellesmere Port plant, although it has not yet announced a date.