UK car manufacturing output hits 17-year high

Production output in the UK car manufacturing industry reached a 17-year high in 2016, boosting prospects for the domestic plastics supply chain.

The latest figures from the Society of Motor Manufacturers and Traders (SMMT), reveal 1,722,698 cars were produced in the country last year, an increase of 8.5 percent on total production in 2015 and the highest output since 1992.

SMMT says more cars are now being exported from Britain than ever before, the result of investments made over recent years in world-class production facilities, cutting-edge design and technology and one of Europe’s most highly skilled and productive workforces.

Total committed investment announcements in the automotive sector in 2016 were approximately £1.66 billion across several companies. However, this figure is down from £2.5 billion in 2015, likely to be a result of caution following the EU Referendum.

Ten brand new car models began production in the UK last year, nine of them from premium brands, which has helped make the UK the second biggest producer of premium cars after Germany and the third biggest car producer in Europe.

Production growth was predominantly driven by overseas demand, with global appetite for British-built cars rising by 10.3 percent to an all-time high of 1,354,216 – a second consecutive annual record. Around eight out of every 10 cars manufactured in the UK is now exported, bound for one of 160 markets worldwide.

It was continuing economic recovery across Europe, however, that accounted for the bulk of the growth. Exports to the rest of the EU grew 7.5 percent to 758,680 and accounted for more than half of all UK car exports Growth was strong across a number of markets, notably the US – the UK’s biggest export destination after the EU – where demand rose by almost half (47.2 percent).

Domestic demand for UK built cars also grew last year, up 2.4 percent in the year, and the UK remains the second largest car market in Europe, again after Germany. One in seven new cars registered by UK buyers is now made in Britain, up from one in eight three years ago.

Mike Hawes, SMMT Chief Executive, described the growth in UK car production last year as “tremendous” stating it is testament to the global competitiveness of the UK automotive sector. “High class engineering, advanced technology and a workforce committed to quality have helped turn around the industry, making the UK among the most productive places in Europe to make cars,” he explained.

However, Hawes was eager to add that the growth came as a result of “significant investment” in new plants and products over the past few years and “not a post-Brexit bounce.” He also stressed the importance of carefully calculated negotiations for new trade deals for the future of the industry. “We want trade deals but they must be the right deals, not rushed deals. Failure to do so could damage UK automotive manufacturing beyond repair,” he concluded.