According to the Society of Motor Manufacturers and Traders both sales and production fell in November with sales of diesel vehicles falling by more than 30%. Tony McDonough reports

Britain’s UK car manufacturers are bracing themselves for the first annual drop in sales since 2011 as domestic demand continues to falter.

There were 163,541 vehicles sold in November, according to the Society of Motor Manufacturers and Traders (SMMT), 11.2% down on the same month last year and the eighth monthly fall in a row.

Sales of diesel vehicles took a 30.6% hit with a 5% rise in sales of petrol-driven vehicles and a 33% rise in alternatively fuelled vehicles.

This has fed through to a 4.6% fall in manufacturing output during November. The SMMT says 161,490 cars left British factories last month, driven by overseas orders, which rose 1.3%.

Exports rise

In November, exports reached their highest proportion of output this year at 85% but production for the home market continued to falter, falling for the fourth month in a row.

It dropped -28.1%, the largest decline in 2017, as consumer confidence decreased and speculation over negative government policies towards diesel affected the market.

So far this year more than 1.5m cars have rolled off production lines, with nearly eight out of 10 destined for one of 160 global markets. While export volumes remain stable, production for the home market is down 9%, resulting in overall output falling 2% since January.

China rise

However, Jaguar Land Rover (JLR), which employs more than 4,000 people at its Halewood plant, appears to be bucking the trend although also seeing much better overseas than domestic sales.

In November JLR enjoyed sales rises in China (19.1%), the UK (8.6%) and in North America (7.8%)… but down 2.1% in Europe.

Jaguar retail sales were 13,688 vehicles in November, down 6.3% compared to the same month last year, as solid sales of the long wheel base XFL in China were more than offset by lower sales of XE.

Land Rover retailed 38,644 vehicles in November, up 17.2% compared to November of last year, primarily reflecting the sales ramp up of the all new Discovery and the introduction of the Range Rover Velar partially offset by softer sales of Range Rover Sport.

Halewood builds three models of Range Rover Evoque – the three-door, five-door and convertible versions – and the Land Rover Discovery Sport.

Brexit uncertainty

Mike Hawes, chief executive of the SMMT, said: “Brexit uncertainty, coupled with confusion over diesel taxation and air quality plans, continues to impact domestic demand for new cars and, with it, production output.

“While it is good to see exports grow in November, this only reinforces how overseas demand remains the driving force for UK car manufacturing.

“Clarity on the nature of our future overseas trading relationships, including details on transition arrangements with the EU, is vital for future growth and success.”