Weak Sterling boosts UK car production to 17-year high

Weak Sterling boosts UK car production to 17-year high
Car manufacturing in the United Kingdom hit a 17-year high in the first three months of 2017, as exports bolstered demand. Sterling has dropped sharply since June 2016's vote to leave the EU, making British cars cheaper for overseas buyers.

In March, Britain produced 170,691 new vehicles, 7.3 percent more than a year earlier and the highest number for any month since March 2000.

In the first quarter, 471,695 cars rolled off the production lines, also the best result since 2000, up 7.6 percent on the same period in 2016. Overseas demand drove the output.

"UK car manufacturing is accelerating thanks to billions of pounds of investment committed over the past few years," said Mike Hawes, CEO of the UK Society of Motor Manufacturers & Traders (SMMT).

If the UK doesn’t lose access to the European single market after Brexit, British car production is likely to hit an all-time high of two million in 2020.

"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," said Hawes.

Hawes is concerned Brussels may punish British diesel cars in the divorce negotiations, and diesel autos make up almost half of production.

"A large proportion 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 penalizing consumers who choose diesel for its fuel efficiency and lower CO2 emissions,” he said.

In January, he warned Brexit could damage the industry “beyond repair.”

Demand in the UK fell 4.3 percent in the quarter, as Britons are concerned about the health of the economy.