LONDON -- UK car production rose by 0.9 percent in September with a rise in exports compensating for a fall in demand at home, the Society of Motor Manufacturers and Traders (SMMT) said.
Output increased to 159,726 vehicles thanks to a 5 percent rise in the number of models sold abroad, representing more than three quarters of the UK's total output, the SMMT said in a statement on Thursday.
Nine-month output rose 11 percent to 1.3 million cars, with exports benefiting from the depreciation in the value of sterling since the country's June 23 referendum to leave the European Union, although the long-term effect on production remains unclear.
It generally takes around two to three years from the point a carmaker decides to build a new model at a plant and the first car rolling off the production line, which means that current manufacturing is based on pre-Brexit investment choices.
Japanese carmaker Nissan Motor Co., which runs the country's biggest car plant, said Thursday it will build its next Qashqai and X-Trail models in the UK. The decision represents the first major investment decision affecting the country's car industry since the Brexit vote.
Following signs that Britain is headed towards a "hard Brexit," which could leave its car exports facing tariffs of 10 percent, Nissan had warned that it could halt new investment in the market.
A hard Brexit is the scenario in which the UK leaves the EU's single market in order to impose controls on immigration, disrupting access to the country's main trading partner.
SMMT CEO Mike Hawes welcomed the rise in exports, which offset a 11 percent drop in domestic demand, but warned that continued success was dependent on unfettered access to key markets.
"Future growth will depend on securing our international competitiveness and the barrier-free access to major global markets that has enabled UK Automotive to thrive," he said.
Nissan, Toyota, and Honda are among automakers that manufacture cars in the UK, along with BMW Group's Mini and Rolls-Royce brands, Volkswagen Group's Bentley, Tata's Jaguar Land Rover and General Motor’s Vauxhall unit.