Car industry generates record £71bn turnover
THE UK’s automotive industry turned over a record £71.6bn last year, helping to support thousands of jobs and generate massive levels of investment, latest figures have shown.
The figures, released by the Society of Motor Manufacturers Traders (SMMT), underline the importance of the industry to the national – and regional – economy.
The industry body’s 17th annual Sustainability Report reveals that employment, production output and vehicle sales all grew while the environmental impact of manufacturing saw significant reductions.
Importantly, access to the Single Market and EU-negotiated international trade deals, the ability to recruit talent internationally and influence new standards all helped make the industry one of the world’s most competitive in the global automotive sector.
This in turn, has helped attract billions of pounds in investment, deliver record productivity, job creation and growth.
The record turnover represents a 7.3% increase on 2014, with the additional value generated for the UK economy standing at some £18.9bn – itself a 3.8% rise on the previous year. Investment in R&D by the industry also reached a record high of £2.5bn in 2015, which now represents some 12% of the country’s total R&D spend.
The SMMT said the figures were further evidence of the UK’s status as a global automotive leader, as production and sales of UK-built vehicles continued to grow both at home and abroad.
The strong performance has been matched by growth in employment, with 814,000 people across the UK now dependent on the sector as a whole for a job – a substantial increase of 17,000 over the previous year. Those employed directly in manufacturing, meanwhile, grew from 161,000 to 169,000, with the average manufacturing worker generating more than £110,000 in value-added to the British economy.
The sector’s strong social and economic performance has been achieved while simultaneously delivering substantial reductions in its environmental impact – 41% less waste was sent to landfill in 2015 than in the previous year, while the amount of water used to make each vehicle fell to a new low.
Mike Hawes, SMMT chief executive, said: “UK Automotive has gone from strength to strength, and is now delivering record turnover, record productivity and more jobs. These strong results go hand in hand with a steadfast commitment to improving our environmental performance, which is clearly demonstrated through reductions in CO2, waste and water use.
“This success has been due to unrestricted access to the Single Market, input to EU legislation to safeguard the interests of UK Automotive, and the ability to recruit talent from abroad.
“Our growth depends on certainty and continued open and reciprocal access to the 100-plus markets with which the UK automotive industry so successfully trades. This is not just finished cars but components, technologies and the wider automotive value chain. Any risks and uncertainty to these fundamental benefits need to be addressed head on by UK government.”
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The report comes as latest figures show UK car manufacturing output rose by a quarter in May, with 150,802 cars produced during the month, a 26.4% jump compared with May last year.
Production for domestic and export markets saw respective rises of 22.7% and 27.3%, as demand for UK-built cars around the world continued to grow.
May’s increase was the biggest since August 2015, which saw a 40.6% increase in output.
Production in 2016 so far is now 13.6% ahead of the same period last year. Output was predicted to be high for 2016 due to record investment levels and the launch of several new models across the UK.
“May’s performance is another strong month for UK car manufacturing, with demand for British-built vehicles up by over quarter. For this success to continue, we need government to maintain economic stability and help deliver the wider benefits – including free access to our biggest market – which have helped make the sector so globally competitive,” added Mr Hawes.
