UK auto output falls 8% in March on weak exports, supply issues, trade body says

April 30 (Reuters) – UK automotive production fell 8.2% in March from a year earlier, hit by a slump in commercial vehicle output, parts ‌shortages at a major plant and weaker exports to Asia and the ‌United States, data from a trade body showed on Thursday.

Although the decline eased from February’s 17.2% fall, ​the outlook for the sector remained challenging, the the Society of Motor Manufacturers and Traders (SMMT) said.

UK carmakers face mounting pressure as the Middle East conflict threatens to further drive up energy costs and pressure demand, while the European Union’s “Made in EU” proposal risks ‌curbing access for UK-made vehicles ⁠to parts of the bloc’s market.

UK’s total auto output in March fell to 72,511 units, with car production down 0.8% at ⁠69,755 and commercial vehicle output down 68.3% at 2,756, the SMMT said.

While exports continued to account for the bulk of output, shipments abroad fell for both cars and commercial ​vehicles. The ​European Union remained the UK’s largest market, ​and demand from the bloc ‌rose for a fourth consecutive month, with exports up 4.8% year-on-year.

“We must ensure any ‘Made in Europe’ proposals from the European Commission do not exclude the UK as the two industries are integrated such that both would suffer if the free trade provisions enshrined in the Brexit deal were undermined,” SMMT CEO Mike Hawes said.

The SMMT ‌and carmakers have called for clarity on whether ​UK-built vehicles would be excluded under the EU’s ​latest proposal, warning that uncertainty could ​weigh on investments as competition from low-cost Chinese electric vehicle ‌makers intensifies.

Earlier this month, the SMMT said ​the annual value ​of EU-Britain automotive trade was about 80 billion euros ($93.59 billion) and the two sides remain each other’s biggest passenger car markets.

“Car production stabilising in March ​is welcome news for both ‌assembly and the wider supply chain,” Hawes said, but warned that geopolitical ​tensions offer little room for optimism.

($1 = 0.8548 euros)

(Reporting by Nithyashree R ​B in Bengaluru; Editing by Diti Pujara)