Strong export demand drives car production growth into double digits
CAR manufacturing picked up pace in March as home and export markets helped to drive demand for new vehicles.
Demand was so strong that production levels rose 12% to 142,158 units, bringing growth in the industry for the year-to-date to 2.9%.
There was a welcome pick-up in the UK with the number of vehicles destined for the domestic market rising 18% on the same month in 2013. The boost was needed after a lull in the first quarter which has seen demand to date decline 4% on last year.
What has really helped the situation is an upswing in the European markets. Export volumes are up more than 10% on 2013 levels with 108,947 vehicles set to go overseas (2013: 98,818). Nearly 80% of cars manufactured in the UK last month were bound for global export markets, helping to boost the UK’s balance of trade.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said: “The 12% growth in UK car production in March is a significant step forward after a period of product changes at the start to the year.
“After several years in the doldrums, European demand for new cars is now picking up with growth in the last seven months. This is a welcome boost for the UK’s volume manufacturers for whom Europe is the key market. As new models are launched and investments realised, the sector remains on course for all-time record levels of output by 2017.”
Commenting on the figures, John Leech, KPMG’s UK Head of Automotive, said that in the last couple of years demand from UK and emerging market consumers had driven growth in UK car production, but now EU consumers were also buying more cars made in Britain.
He said that with the Nissan Qashqai, BMW Mini and Range Rover Sport all successfully launched in the last few months, there was an expectation of strong year on year growth for the rest of 2014.
“With exciting new model launches planned over the next three years, including the new Vauxhall Astra and Jaguar XE, I am confident that car production will continue to rise towards 2m vehicles in 2017 and a huge £8bn trade surplus,” he added.
