Exports are currently the “bedrock” of the British car industry. This was recently stated by the British automobile association “SMMT” in its publication of the production figures for January. This statement is easy to understand when you see that British car production destined for export has risen by 4.1 percent year-on-year compared to January 2019. At the same time, car production for the domestic market fell brutally by 23.9 percent! Just because 82.7% of British car production is destined for export, the total production decline is only -2.1% on average. So the “bedrock” export hides the brutal weakness in demand on the island.
So it is understandable that The Association, together with the publication of the data, is also begging and pleading with Boris Johnson in London. The government must do something. In the government’s upcoming budget, concrete steps must be taken to stimulate the consumer market in Great Britain. In addition, a trade agreement with the EU must be concluded. SMMT believes that although the UK has left the EU, in the current transition phase it only has time until December to conclude a workable free trade agreement. It is almost impossible in such a short time! But what is the British government doing? It is only making things worse. At the moment it is even threatening the EU with a break off of the negotiations if there is no progress until June. How funny, we think. Because the only indecisive brakes and chaotic non-negotiators are the British!
Effects on the British Pound
The following chart shows the detailed data of SMMT and the chart shows the British car production since 2014. By the way: Thanks to the current threat by Boris Johnson towards Brussels, the British Pound is falling today by a good 50 pips against the US Dollar and by a good 65 pips against the Euro. Is the same theatre going on again as before the official exit of the Brits, where they themselves do not know what they actually want? Is a big Pound devaluation imminent in the current year, when it becomes more and more clear that Boris Johnson will not get the super great deal he promised his fellow countrymen?
Here is the SMMT’s request to the government in London:
Exports are the bedrock for UK car manufacturing. So a rise in January exports is welcome following recent declining demand in overseas markets. These figures, however, still give great cause for concern. With another month of falling car production driven by a lack of confidence and corresponding weak demand in the UK. The upcoming Budget is an opportunity for the government to provide supportive measures to stimulate the market. But the biggest boost would be the agreement of an ambitious free trade deal with Europe. This would end the ongoing uncertainty and help the UK to recover its hard-won reputation as a great place for automotive investment.