Car industry accelerates as weaker pound pushes up exports

british motor manufacturing at risk

The UK car industry has seen its best month for manufacturing since the beginning of 2000, as overseas demand sees exports increase by over 10 per cent in the year to March, reports Sky News.

New figures from the Society of Motor Manufacturers and Traders (SMMT) show that British car makers produced 170,691 vehicles last month, the highest seen in 17 years.

An increase in exports was a big reason for the jump, with one car sent overseas every 20 seconds during the course of March.

Overall, 471,695 vehicles have been manufactured in Britain so far this year, again making it the most successful quarter since Q1 2000.

The weakness in the pound means it is now cheaper for overseas consumers to buy vehicles from Britain, giving UK firms which export abroad a competitive advantage.

But the SMMT has previously warned that the currency volatility is a double edged sword; sterling weakness has also pushed up the price of parts brought into the UK from abroad, and with 60 per cent of the industry’s supply chain currently based overseas this could mean price rises of an average of 3 per cent for UK buyers.

Mike Hawes, the chief executive of the SMMT, said the billions of pounds invested in the industry over the past few years was starting to bear fruit.

“A large proportion (of new cars being made) are the latest low emission diesels and it’s essential for future growth and employment that we encourage these newer, cleaner diesels onto UK roads and avoid penalising consumers who choose diesel for its fuel efficiency and lower CO2 emissions.

“Much of our output goes to Europe and it’s vital we maintain free trade between the UK and EU or we risk destroying this success story.”

The news comes as US car companies also gear up to reveal whether Donald Trump’s first 100 days in office have had an impact on production.

Ford, one of the country’s biggest manufacturers, is due to release its first quarter financial results later.