2019.05.3004:19:00UTC+00UK Car Production Plunges Nearly Half On Brexit Shutdowns

UK car production plunged in April as manufacturers rescheduled factory shutdowns to prepare for the expected uncertainty on the original Brexit deadline on March 29.

Car production logged a sharp contraction of 44.5 percent year-on-year in April, the Society of Motor Manufacturers and Traders, or SMMT, said Thursday. Only 70,971 cars rolled off production lines in April. Production shrunk for an eleventh straight month.

Production for home and overseas markets decreased 43.7 percent and 44.7 percent, respectively. Many manufacturers brought forward, and extended, production stoppages normally scheduled for the summer holiday period, the SMMT said.

The deadline for the UK to leave the European Union has now been extended to October 31 as the Theresa May government failed to secure lawmakers' approval for a Brexit deal.

Shutdowns cannot be rescheduled again for the October-end deadline as they were part of a series of costly and ongoing contingency measures that includes stockpiling, rationalization, training for new customs procedures and rerouting logistics, the SMMT said.

Such steps were designed to cushion the disruptive impact of the UK leaving the customs union and single market, the group said.

April's dismal performance worsened the underlying downward trend, in the backdrop of slowing demand in key international markets, including the EU, China and the US, as well as at home, the SMMT said.

During January to April period, car production decreased 22.4 percent from the corresponding period last year, of which output meant for export decreased 23.3 percent.

"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," Mike Hawes, SMMT chief executive, said.

SMMT repeated its call for urgent action to end Brexit deadlock and prevent 'no deal' devastation.

The Production Outlook from AutoAnalysis forecast 1.36 million units for this year, which is about 10.5 percent less than the 1.52 units produced in 2018. The projection is based on the assumption of a favorable Brexit deal and transition period maintaining the status quo, the SMMT said.

The lobby cautioned that a 'no deal' Brexit could exacerbate the decline, with the threat of border delays, production stoppages and additional costs compromising competitiveness.