UK new car production plummets by 10 per cent in May after record start to 2017

Figures released on Thursday by the Society of Motor Manufacturers and Traders (SMMT), show 136,119 new cars were built last month, a 9.7 per cent fall with the same period in 2016

New car production had enjoyed a record start to the year, but slowed in April after a 20 per cent drop on the previous year as a result of a new vehicle excise duty (Matt Cardy/Getty Images)

UK new car production is stuck in reverse after another month of declining production, new figures show.

Figures released on Thursday by the Society of Motor Manufacturers and Traders (SMMT), show 136,119 new cars were built last month, a 9.7 per cent fall with the same period in 2016.

New car production had enjoyed a record start to the year, but slowed in April after a 20 per cent drop on the previous year as a result of a new vehicle excise duty.

The slowdown comes as car manufacturers prepare to ramp up production of new models, with exports remaining the main driver of demand. 576,556 new cars have been shipped abroad since January, a 0.8 per cent increase year-on-year, although production for overseas markets fell by 9.0 per cent in May. Almost 80 per cent of British cars are exported, with more than half going to Europe.

Production for the home market fell by 12.8 per cent in May, down 8.1 per cent in the year-to-date. Despite this, nearly 730,000 new cars have been made in Britain in the first five months of the year, following the record performance seen in Q1.

Mike Hawes, SMMT chief executive, said: “After a record start to the year, car production in the UK has slowed as production lines gear up for a range of new models. Global demand is strong and exports remain the driving force for British car production volumes in the UK. Maintaining our current open trade links with Europe, our biggest market, and further developing global markets is vital for this sector.”

The SMMT has been one of the most vocal trade bodies opposed to Brexit.

Earlier this month, it warned of “permanent damage" and "death by a thousand cuts" in investment that could lead to a surge in the price of new cars from Europe by as much as £1,500.

Total British car production rose to a 17-year high in the first three months of 2017, with growing overseas demand offsetting weaker appetite from domestic car buyers.

But overall production fell by 18 per cent in April on the previous year, the fastest rate in more than two and a half years.