LONDON -- UK car production rose by 26 percent in May thanks to particularly strong demand for exports, but momentum could be halted by a loss of tariff-free access to Europe after last week's Brexit vote, the Society of Motor Manufacturers and Traders (SMMT) warned today.
The country's overwhelmingly foreign-owned car industry was at the forefront of big business's unsuccessful efforts to persuade Britons to vote to stay in the European Union and is now seeking guarantees that uninhibited access to its biggest market will continue.
In May, UK plants built 150,802 vehicles, the SMMT said in a statement today. This helped push up production by 14 percent to 738,516 in the first five months of the year.
"For this success to continue, we need government to maintain economic stability and help deliver the wider benefits -- including free access to our biggest market -- which have helped make the sector so globally competitive," SMMT CEO Mike Hawes said.
John Leech, head of automotive for consultancy KPMG, said in a note today that UK production should continue to rise because of the weaker pound, but he is less optimistic about the country's long-term prospects.
“[The] sterling has depreciated by 15 percent since November 2015 and following the Leave Vote, it is likely to remain at these levels and will further bolster UK car production in 2016 and 2017," Leetch wrote. "However, the long-term future of our mass-market car manufacturers is dependent on securing free access to the single market and freedom of movement of people with the EU. It will remain an uncertain time for UK car plants and their workers during the next two years, notwithstanding the positive car production news expected during this time.”