Domestic demand fell by almost a quarter in the first month of 2020.

The body representing the British car industry says a small decline in car production in January is down to weak demand here in the UK. It comes after figures showed a 2.1 percent drop in car manufacturing on these shores during the first month of 2020.

Figures from the Society of Motor Manufacturers and Traders (SMMT) show just over 118,300 cars were built in British car factories last month, down from almost 121,000 in the same month of 2019. It’s a relatively small decline when compared with last year’s figures, which saw output fall by more than 14 percent, but it’s the way the market is split between imports and exports that’s most striking.

Last year, there were double-digit declines both at home and abroad, with the domestic market falling by a little more than 12 percent and the export market shrinking by almost 15 percent. In January, though, there was a steep drop-off in demand for British-built cars here in the UK, and an increase in demand from foreign markets couldn’t offset the reduction.

The figures show just under 98,000 cars built here during January were destined for foreign countries, up from around 94,000 in January 2019. That’s an increase of around four percent, and a welcome result after December saw demand from export markets fall by a similar amount.

Mini Oxford plant

However, just 20,444 cars built by British factories were made for UK customers, down from almost 27,000 in January last year. That decline of almost 24 percent saw the proportion of cars built for domestic customers drop from 22 percent last January to just over 17 percent in the first month of 2020.

Mike Hawes, the SMMT’s chief executive, said the increased demand for exports was encouraging, but the government needed to restore consumer confidence to prop up the domestic market.

Nissan Juke production at Sunderland UK plant

“Exports are the bedrock for UK car manufacturing so a rise in January exports is welcome following recent declining demand in overseas markets,” he said. “These figures, however, still give great cause for concern, with another month of falling car production driven by a lack of confidence and corresponding weak demand in the UK.

“The upcoming Budget is an opportunity for the government to provide supportive measures to stimulate the market, but the biggest boost would be the agreement of an ambitious free trade deal with Europe. This would end the ongoing uncertainty and help the UK to recover its hard-won reputation as a great place for automotive investment.”