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|"Car manufacturing up... however this growth may be coming to an end"|
|Thursday, 25 August 2016|
Chris Bosworth, Director of Strategy at Close Brothers Motor Finance, comments on the SMMT UK monthly automotive manufacturing figures for July: “Today’s figures for production in the car manufacturing industry continue to emulate the volumes we have seen over the last year, with production and output accelerating at unprecedented levels. However, as figures revealed earlier this week show, there are a number of factors which indicate that this growth may be coming to the end”.
“The steady flood of new cars that have entered the market over the last year has resulted in a glut of used vehicles beginning to emerge, with these two or three-year-old cars making consumers gravitate to well-priced ‘nearly-new’ stock. At the same time exchange rate movements makes the UK a less attractive place to sell cars meaning that manufacturers are less inclined to subsidise finance on new vehicles”.
“The outcome of Brexit is also beginning to affect foreign-based manufacturers, with announcements that many are reducing staffing hours, as a result of the fall in the pound from Brexit. This gives UK exporters a boost. However, profits of these firms are likely to fall unless they increase prices of new vehicles – which will again reduce demand-side pressures on UK car manufacturers”.
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