Skip to content

Good Times Ahead For UK Car Exports

The UK car industry has enjoyed a bumper 2012 and the immediate future at least is looking very good indeed. Domestic registrations are up but the figures reveal that the vast majority, some 80%, of new motors are being exported. How does this impact our economy and are all these exports good news for British jobs?

The UK car industry has enjoyed a bumper 2012 and the immediate future at least is looking very good indeed. Domestic registrations are up but the figures reveal that the vast majority, some 80%, of new motors are being exported. How does this impact our economy and are all these exports good news for British jobs? The success of domestic manufacturers like Jaguar Land Rover and indeed Nissan is good news for the British economy in a number of respects. Politicians are currently keen on stressing the need to rebalance the economy away from a perceived over dependence on the financial sector and an increase in manufacturing output certainly achieves that.

 
Our car firms' high percentage of exports is also good news in addressing our balance of payments with other countries. In terms of creating jobs though, the picture is less clear. Success in the international motor industry means being incredibly efficient. In real terms that means more and more automation and employing fewer people to produce the same number of cars. The success of our car industry is illustrated in the fact that while employing only 0.5% of the country's workforce, they account for 11% of our exports. Is this a model our other manufacturers could follow to increase jobs? Perhaps not.
 
If our other manufacturing companies were capable of reproducing the efficient model employed by the car industry that could certainly mean more exports but they would have to shed jobs to achieve the necessary productivity. This can be seen in the job figures for the car industry. The Society of Motor Manufacturers and Traders (SMMT) has estimated that there were 737,000 jobs in the UK that depended on the car industry in 2010. That is a reduction of 131,000 on 2005 figures. Thus, despite record production figures and increased productivity, jobs in the sector are actually falling. 
 
This does not always have to be the case. In theory if demand continues to rise then jobs can be sustained or even increased. In reality though the world's top manufacturers are so lean that the only way we can compete is to make more with fewer people. Manufacturing does create jobs in other sectors, such as retailing and transport so it will always be important. It seems though that even if the government is successful in rebalancing the economy with increased manufacturing, jobs are unlikely to increase. It is likely then that the challenge for the government and for industry is to find new sectors where the UK economy can compete globally.

Posted by on

Back to February 2013

Back to top