Car production reaches six year high as global demand fuels growth

CAR production in the UK has risen to its highest level for six years, with output surpassing 1.5m units, latest figures show. This means a new car rolled off production lines at a rate of one every 20 seconds.

The volumes represent a 3.1% increase on 2012’s figures, which were also strong. Industry analysts are now predicting output could reach record levels of around 2m units by 2017 meaning the UK is in line to become the third largest car manufacturer in Europe behind Germany and Spain.

The strong performance could have been even better had the Eurozone shown the same resilience as the UK’s new car market.

Despite the improving picture, the number of vehicles exported actually fell last year compared with 2012, largely due to depressed demand on the continent.

Nevertheless the 79.6% (2012: 82.7%) of cars which were exported helped to improve the UK’s overseas trade record.

Much of the strength of the export markets is due to companies like Jaguar Land Rover producing vehicles consumers want to buy. The popularity of its vehicles has led to new plants in China and Brazil, while in the UK it is investing massively in increasing production output with the development of a new £0.5bn engine plant at the i54 site near Wolverhampton and a second aluminium bodyshop at Solihull for its new range of all-aluminium vehicles.

But it is not just JLR that is expanding. BMW has announced fresh investment in jobs and growth at its plants in Hams Hall, Swindon and Oxford for the production of the new Mini, while the Nissan plant in Sunderland is taking on hundreds of new people to work on the production of the new Qashqai.

Business Secretary Vince Cable said the improving figures were a sign that the British car industry was going from strength to strength.

“Our success lies in the appetite from countries around the world for British cars. Around 80% of the 1.5m cars we produced last year were exported – a testament to the diverse, high quality of British manufacturing,” he said.

“It also highlights the benefits of industry and government working together and we want to continue this partnership through a long-term strategy. This will give businesses the confidence to invest, speed up development on vehicles of the future and keep the UK as a world leader in cars. Our investment of £1bn jointly with industry will help do this, while also delivering jobs and driving growth.”

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said the volumes demonstrated the value of the UK’s diverse car manufacturing industry.

“UK automotive investment announcements exceeded £2.5bn in 2013, reinforcing industry analysts’ suggestions that the UK could break all-time car output records within the next four years,” he said.

Ironically production volumes declined in December, indicating how strong the rest of the year was.

The figures break down as follows: