UK car production fell last year for the first time since the height of the recession in 2009, industry figures show.
The figures from the Society of Motor Manufacturers and Traders (SMMT) revealed 1.67 million vehicles rolled off production lines in 2017, a 3% decline on 2016.
There was a sharp 9.8% decline in vehicles produced for the domestic market, according to the data.
That was blamed on declining business and economic confidence, as well as confusion over Government policy on diesel.
There is also uncertainty over what Brexit will mean for the industry.
The SMMT has pushed for membership of the single market and customs union to be maintained, with a post-Brexit transition deal that “allow(s) business to continue as usual until a new trading relationship with the EU is in place”.
Just over half the cars (53.9%) made in the UK are exported to other European Union countries. The next major destination is the US (15.7%).
Mike Hawes, SMMT chief executive, said: “The UK automotive industry continues to produce cars that are in strong demand across the world and it’s encouraging to see growth in many markets.
“However, we urgently need clarity on the transitional arrangements for Brexit, arrangements which must retain all the current benefits else around 10% of our exports could be threatened overnight.
“We compete in a global race to produce the best cars and must continue to attract investment to remain competitive.
“Whilst such investment is often cyclical, the evidence is that it is now stalling so we need rapid progress on trade discussions to safeguard jobs and stimulate future growth.”
Overseas markets have grown increasingly important, representing four-fifths of output – with the EU remaining the biggest trading partner – though exports were also down, by 1.1%.
The total car production figure was still the second-highest output in 17 years, the SMMT said.
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But it was 130,000 lower than its mid-year forecast had suggested.
Meanwhile, UK automotive investment fell by 33.7% last year, according to the same figures, with £1.1bn earmarked for vehicle and supply chain manufacturing, down from £1.66bn in 2016.
Source: Sky