UK car industry cuts 11,000 jobs as production plummets

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·2 mins read
A member of staff at the Vauxhall car factory cleaning and disinfecting a workstation. Photo: Colin McPherson/Corbis via Getty Images
A member of staff at the Vauxhall car factory cleaning and disinfecting a workstation. Photo: Colin McPherson/Corbis via Getty Images

UK car manufacturers have suffered their worst start to a year since 1954, with experts warning the industry could face further devastation unless politicians can agree a trade deal with the EU before the year is out.

The Society of Motor Manufacturers and Traders (SMMT) said on Thursday that the first six months of 2020 marked the worst six month period for UK car production since 1954.

Factories made just over 380,000 cars, which was 285,000 fewer than in the same period last year. Production fell by almost 50% in June, SMMT said, with just 56,594 cars produced.

The collapse in production has led to a jobs crisis in the industry, with at least 11,349 roles lost so far this year. Car manufacturers Ford (F), Bentley, Jaguar Land Rover, McLaren, Aston Martin (AML.L) and Renault (RNO.PA) have all announced cuts, while dealerships like Looker have also slashed jobs.

“These figures are yet more grim reading for the industry and its workforce, and reveal the difficulties all automotive businesses face as they try to restart while tackling sectoral challenges like no other,” said SMMT chief executive Mike Hawes.

“Recovery is difficult for all companies, but automotive is unique in facing immense technological shifts, business uncertainty and a fundamental change to trading conditions while dealing with coronavirus.”

READ MORE: Aston Martin’s losses soar as COVID-19 causes sales plunge

The COVID-19 pandemic forced production sites across the country to shut for much of April and May. Car sales also slumped as the crisis hit, creating further problems.

SMMT predicted that the slow start to the year meant the UK would produce only about 880,000 cars this year — its lowest total since 1957.

Hawes said a Brexit trade deal was crucial to helping the industry bounce back and warned that without it, production levels could remain near historic lows for years to come.

“Our factories were once set to make 2 million cars in 2020 but could now produce less than half that number,” Hawes said.

“This industry has demonstrated its inherent competitiveness and global excellence over the past decade. Its long-term future now depends on securing a good deal and a long-term strategy that supports an industry on which so many thousands of jobs across the country depend.”

Last week the EU’s chief Brexit negotiator said a trade deal by the December 2020 deadline was “unlikely” and warned that both sides have just weeks to come to an agreement.

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