Export demand drives growth in UK vehicle production

UK car manufacturing has seen a successful start to 2017, with vehicle output in January up 7.5% compared with the same month last year.

Figures published by the Society of Motor Manufacturers and Traders (SMMT) show 147,922 vehicles were produced last month, up from 137,552 in January last year.

Encouragingly, there was a near 11% increase in the number of cars produced for export – 117,916 compared with 106,441 in January 2016.

Unfortunately, it was the domestic market that struggled, with the number of vehicles produced for the UK down 3.6% at 30,006, compared with 31,111 in January 2016.

The performance follows a very strong year for UK car production in 2016, with total car production reaching 1.7 million – a 17-year high for the sector.

Mike Hawes, SMMT chief executive, said: “UK car manufacturing made a very positive start to the year, carrying on the strong performance from 2016.

“These latest results highlight, once again, the export-led nature of our industry and the global appeal of our products. Future growth will depend upon maintaining our competitiveness, not least in terms of securing a future trade deal with the EU that allows us tariff-free access to our biggest market and the ability to move goods freely, unimpeded by any bureaucratic restrictions.”

Separately, engine production enjoyed its best start to the year ever, with output rising 12% to 235,076 units – the best January on record.

UK demand continued to rise, with production for the domestic market growing 6% to 95,371, compared with 89,998 in January last year.

There was double-digit growth for exports as global demand saw volumes increase 16.5% to 139,705, compared to 119,888 in January 2016.

Mr Hawes added: “A record month in January is certainly a great start to 2017, and it is encouraging to see last year’s success in the domestic market continue. Double-digit growth in global demand for British-built engines is also welcome, highlighting the importance of international trade for this sector – and, critically, the need to maintain international competitiveness.”

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