The Society of Motor Manufacturers and Traders (SMMT) says the UK market was cooling in line with forecasts, following a long period of record growth
The industry is likely to fall short of its ambition to produce more than two million cars a year by 2020, the SMMT said.
UK car manufacturing was down in June, which mirrored a decline in UK car sales.
Over the first six months of 2017, sales were distorted by a rise in Vehicle Excise Duty in April, which prompted drivers to bring forward purchases of new cars.
The first six months of 2017, when compared with the equivalent period last year, still showed a fall in UK sales.
As concerns mount over Brexit and the effect of the ongoing uncertainty on investment, the SMMT analysis also suggests that failure to secure a deal – or, at the very least, an interim arrangement maintaining current trading conditions – could cause output to fall in 2019. Supply chain disruption caused by ‘hard’ border controls as the UK leaves the customs union and price increases driven by WTO tariffs, could result in a 10 percent hit to production, taking volumes back to 2016 levels
A so-called hard Brexit, with the UK leaving the EU single market and customs union, could hit production.
The CEO of the Society of Motor Manufacturers and Traders said: “The government has been in ‘listening’ mode but now it must put on the table the concrete plans that will assure the future competitiveness of the sector.”