British car production fell last year for the first time since 2009 and investment slumped by a third as uncertainty over Brexit cut domestic demand and companies’ new spending plans, an industry body said yesterday.

Production was down three per cent at 1.67 million vehicles, mainly due to a 10 per cent reduction in domestic demand, which was also impacted by a lack of government clarity over diesel levies, the Society of Motor Manufacturers and Traders (SMMT) said.

Investment fell a third to £1.1 billion and the SMMT said some companies were waiting to see what sort of transitional deal Britain negotiates with the EU. This will bridge Britain’s exit from the EU in March 2019 while terms of its new relationship with the bloc are finalised.

“A drop of that magnitude is of concern and it bears out what we know anecdotally which is that people are waiting as long as they can for increased certainty to make those investments,” said SMMT chief executive Mike Hawes.

Hawes said output would remain “broadly the same” in 2018 as model changes continue and a long-cherished goal of beating an all-time high production of 1.92 million cars achieved in 1972 by 2020 was “hard to foresee us reaching”.

Automakers are hoping London and Brussels agree a deal which will allow Britain to maintain free and unfettered trade with its biggest car export market until at least the end of 2020.

Four of Britain’s six major carmakers recorded slumps in production last year, including the country’s biggest automaker Jaguar Land Rover and Nissan, which operates Britain’s biggest factory. Output at both companies fell two per cent.

At Peugeot’s Vauxhall Ellesmere Port, where the French carmaker is cutting staff to improve efficiency and tackle falling demand for its Astra Sports Tourer model, output slumped 22 per cent.

Toyota’s production fell 20 per cent with the company due to announce what will replace its current line of Avensis family cars and Auris hatchbacks.