Automotive sector set to prosper further in 2013
THE UK automotive sector can look back and be proud of its achievements during 2012 – a year that saw it become the second largest industry of its kind in Europe, the Society of Motor Manufacturers and Traders has said.
The SMMT said that while the global economy endured recession, the automotive industry flew the flag for the UK; the pinnacle of its achievements evident by its overtaking of France to become Europe’s second largest new car market and production levels up almost 10% on 2011.
Domestic new car sales are now even stronger with more than 5,500 new cars finding homes every day.
The SMMT said the UK automotive sector has an annual turnover of around £55bn with more than 40 global companies basing their operations here, delivering investment, boosting skills and employing more than 700,000 people. This sizable workforce is world-renowned for its flexibility, engineering expertise and the quality of vehicles it produces.
It has predicted that in 2013 new car registrations will rise to 2.015m units, up 0.1% on the 2012 forecast, while in 2014, registrations will reach 2.062m units, up 2.3% on the 2013 forecast.
Paul Everitt, SMMT Chief Executive said: “The UK has out-performed our European partners during 2012 with vehicle manufacturing and new car registrations rising strongly through the year.
“While most EU markets have been impacted by Eurozone instability, the UK has benefited from £6bn of new investment from global vehicle manufacturers during the past two years, with car production set to break all-time records in the years ahead. At the same time new car buyers have responded positively to the exciting and fuel-efficient new models now on the market helping to boost registrations and make the UK the second largest market in Europe.”
He said that looking in detail at the UK new car market, it was clear that fuel efficiency and new types of vehicle had attracted buyers into dealerships. The average emissions of a new car have fallen to 133.2g/km, down more than 3.5% in just a year.
The Mini and Supermini segments have shown the greatest growth in recent years (increasing market share by 6.6% in the last five years), and those in the Dual Purpose segment have been particularly strong (increasing share by 2.4% since 2007).
In the automotive supply chain, a sector strongly represented in the West Midlands, it said there was good cause for optimism.
At present, about 80% of all component types required for vehicle assembly operations can be sourced from UK suppliers and this year, the Automotive Council identified more than £3bn worth of opportunities for domestic suppliers, naming key components that vehicle manufacturers are looking to source in the UK.
The UK automotive supply chain typically generates £4.8bn of added value annually to the UK economy and there are around 2,350 UK companies that regard themselves as ‘automotive’ suppliers, employing 82,000 people.
It is estimated that every job in UK vehicle assembly supports 7.5 elsewhere in the economy and of all UK suppliers, more than 70% manufacture their products in the UK.
The optimism for 2013 is shared by Rachel Eade, automotive supply chain specialist at the Manufacturing Advisory Service.
She said the supply firms that had come through the dark days of 2008/09 when orders were falling off a cliff were now in an excellent position to make the most of over £5.5bn of investment into the sector – all announced in the last 18 months.
“This includes Jaguar Land Rover committing to a new engine plant at Wolverhampton and expansion at its other plants, a £125m cash boost by Nissan at Sunderland and significant backing by Honda, BMW, Toyota and SAIC Motor UK,” she said.
“Add into the mix a sprinkling of new factory openings and expansions further down the supply chain and there is good reason for our manufacturers to be optimistic.”
