The Society of Motor Manufacturers and Traders (SMMT) has warned that increasing reliance on exports requires a "seamless relationship" between the UK and Europe, as exports grew 1.5% to a record 119,252 units in January.
UK manufacturing remained stable at 147,481 units, with just 72 fewer cars produced in January compared with the same month last year. However, domestic demand fell 6% to 28,229 during the month from 30,027 in January 2017 - the sixth consecutive slip in domestic demand but slightly less severe than the 6.3% decline across total UK new car registrations.
SMMT chief executive Mike Hawes said: “While it is good to see global appetite for British-built cars reach record levels in January, this only reinforces the industry’s increasing reliance on overseas demand. Future growth will therefore depend on maintaining our current open trade links not just with Europe but with key international markets.”
The UK car market has been declining steadily for a number of months, with consumer uncertainty amid ongoing Brexit negotiations and a sharp decline in diesel purchases blamed for the falling registration figures.
The production figure is promising, though, being just 0.05% lower than January 2017, the highest month of car production since records began.
A knock-on effect of the diesel slump has been rising average CO2 emissions across new cars - the 0.8% growth over January 2017 to 121g/km is the first increase since records began, according to SMMT figures.
“A transitional deal will be an important first step but, in the long term, a seamless relationship between the UK and Europe must be maintained. The EU remains the third largest new car market in the world and, given it is on our doorstep, it is not surprising it accounts for more than half of our global exports,” said Hawes.
The UK automotive manufacturing industry employs 169,000 people, accounting for 13% of the UK’s total exports and contributing more than £21.5 billion to the UK economy.
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