LONDON -- UK car production is unlikely to hit a full-year goal of 1.59 million cars, due to weaker overseas demand, the Society of Motor Manufacturers and Traders (SMMT) said today.
The SMMT said manufacturing in October fell by nearly 7 percent to 150,060 cars due to a more than 10 percent fall in exports, which account for four in five of all cars built in the UK.
The SMMT said it was now unlikely that the UK would hit the target forecast at the start of the year as key markets in western Europe and the ailing Russian market continued to suppress demand.
The October figure took ten-month production to 1.28 million, a small drop of 0.3 percent over the same period the year before. The UK built a total of 1.5 million cars last year, with around half of all exports destined for the European Union.
SMMT CEO Mike Hawes said new models would help the industry, but blamed weak foreign demand for October's fall, the third consecutive month output has lagged 2013 figures.
"The UK's car manufacturing industry is still in a strong position in spite of the growing uncertainty surrounding the global economy," he said.
Commenting on the monthly production figure, John Leech, KPMG’s UK head of automotive, said the “surprising fall” in UK car production was also due a higher amount of lost production days arising from supplier issues, as well as weaker export demand.
“I do not expect this downward trend to continue, as planned model launches should see UK production rising towards 2 million cars sold in 2017,” Leech said.
Data released last week showed the French and German economies barely grew in the third quarter. The UK's economy is expected to slow in the fourth quarter, hurt in part by lower exports.
On Tuesday, analysts warned that signs of an economic slowdown across Europe could snuff out a fragile car market recovery.
In Russia, the UK's second-biggest non-EU export market in 2013, car sales have dropped sharply over the last few months due to the weak economy following Western sanctions imposed following the conflict in Ukraine.
But production in the UK for domestic buyers, which accounts for the remaining fifth of overall output, rose by over 10 percent in October, with demand boosted by cheap credit.
Reuters contributed to this report