Fears of a no-deal Brexit also lead to halving of investment in British car manufacturing

British car production dropped to a five-year low in 2018, as manufacturers warned that fears of a no-deal Brexit have prompted a slump in new investment.

UK car factories produced 1.52m vehicles last year, 9.1% fewer than 2017, according to figures published on Thursday by the Society of Motor Manufacturers and Traders (SMMT), the UK auto industry lobby group. Production for the British market fell by 16.3%.

Investment into British car manufacturing almost halved during the year to £588.6m, a fall which the SMMT blamed on Brexit uncertainty. Publicly announced investments were lower than in any year since 2012, the first year comparable data was collected.

“Investment is effectively stalled,” said Mike Hawes, the SMMT’s chief executive. “Industry is waiting to see what happens. Business is sitting on its hands in terms of investment.”

The global automotive industry is already struggling with multiple challenges. Car sales in China fell in 2018 for the first time since the 1990s, while demand for diesel vehicles in Europe has been rocked by the regulatory backlash to Volkswagen’s emissions-cheating scandal.

However, manufacturers with UK operations have expressed growing concerns that a no-deal Brexit will damage one of the most prominent British manufacturing success stories to the benefit of other nations.

Carmakers have built their businesses around “just-in-time” deliveries of parts, meaning delays at the border could be costly, risking British jobs.

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