Automotive industry set for decade of growth as demand for ‘Brand Britain’ escalates

THE UK automotive industry is on course to break manufacturing records by the end of the decade – triggering a steep rise in jobs, especially in the supply chain, a new report has forecast.

The Society of Motor Manufacturers’ report predicts that annual car production will pass the two million milestone by 2020 – breaking the current record of 1.92m cars – set in 1972, when the most popular car was the Mark Three Ford Cortina (pictured).

To put this into perspective, more than 1.5m cars were built in the UK last year, while latest figures for 2015 show output increased 40.6% in August to 99,910 (2014: 71,067), with year-to-date production volumes passing one million to 1,011,127 (2014: 994,951); a gain of 1.6%.

According to the new report, acceleration in productivity and production volumes towards the end of the decade will see the UK consolidate its position as the third-largest car maker in Europe, behind Germany and Spain but ahead of France and a strengthening Eastern Europe.
 
The report – The Future of UK Automotive Manufacturing in 2025 and Beyond (read SMMT Future of Automotive Manufacturing in 2025) – also predicts a rise in employment, with jobs growth in the sector driven predominantly in the supply chain. Up to 9,500 jobs will be created at source by vehicle manufacturers, but that could generate a potential extra 28,000 at component supply companies as UK manufacturers’ demand for home-grown components increases.
 
Key to the sector’s success is the ‘shift to premium’ – in other words, the increasing value of the vehicles made in – and exported by – British manufacturers. In 2010, 37% of UK car production was attributable to premium manufacturers; this is projected to rise to 54% by 2020 such is the demand for Brand Britain.

The changing trend is largely due to the expansion of Jaguar Land Rover although other British brands such as Aston Martin, Bentley and Rolls-Royce have also seen growth.

While none of the companies are British owned, the increasing global demand for British-built premium vehicles is benefiting the whole economy, the report claims. This is because more value is being generated for each vehicle exported. The UK is already Europe’s second-highest producer of premium cars, behind Germany.
 
Since the recession, the UK automotive sector has undergone a renaissance with significant investments – including a cumulative £2bn-to-date in 2015 alone.

The report concludes the prospects for the UK automotive sector are well grounded – although much will depend on global market conditions and the prospect of future investments which assume the UK’s continued membership of the European Union.
 
Mike Hawes, SMMT chief executive, said: “This report is further proof of the growing stature of the UK as a global destination for high quality vehicle manufacture. The automotive industry has made tremendous strides in recent years, as significant investment, along with partnership with government, has driven huge growth in production and employment.Ford Cortina
 
“The prospect of further jobs growth, particularly in the supply chain, is extremely encouraging, while the UK’s consolidation as a global hub for premium production is testament to our prowess in design and precision engineering. This success, built on improvements in productivity, workforce flexibility and skilled people, has been hard-fought for; we cannot be complacent.

“Future growth in a fiercely competitive global market will rely upon continued government support, as well as an attractive business environment which drives investment and stimulates innovation.”

Best Sellers    
Year 1972 2015 (to date)
1. Ford Cortina (Mark III) Ford Fiesta
2. Ford Escort Vauxhall Corsa
3. Morris Marina Ford Focus
4. BL 1100/1300 Volkswagen Golf
5. Vauxhall Viva/Magnum Nissan Qashqai

 

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