Car manufacturers predict further UK growth in 2014With the record breaking year of car sales in 2013 now behind us, manufacturers and industry observers are turning their attention to 2014 and what might be in store for the UK’s car industry. Sales grew by 10.8% in 2013 but the Society of Motor Manufacturers and Traders (SMMT) is playing down expectations for 2014 and is predicting only a 1% growth in sales.
With the record breaking year of car sales in 2013 now behind us, manufacturers and industry observers are turning their attention to 2014 and what might be in store for the UK’s car industry. Sales grew by 10.8% in 2013 but the Society of Motor Manufacturers and Traders (SMMT) is playing down expectations for 2014 and is predicting only a 1% growth in sales. The modest forecast is predicated on fears that the market is approaching saturation point. Manufacturers themselves, however, are more bullish and most expect to smash this modest target. Renault has surprised many by predicting a sales increase in 2014 of close to 2013’s 10.8% figure.
In a statement, Renault’s UK managing director, Ken Ramirez, said: “With three consecutive quarters of GDP growth now achieved, we can be optimistic that the economy is on a steady path to recovery. We anticipate growth to continue this year in the car and small truck market, up to 10 per cent up on 2013.” Mr Ramirez’ predictions reflect growing confidence in the UK economy in general, which many carmakers expect to continue to grow in 2014. Such attitudes are particularly pleasing for the government, who will take this as evidence that their austerity policies are finally resulting in economic growth. With an election coming up in a little over a year, such news is especially welcome.
The car industry has become hugely important to Britain’s economic well-being. From the depths of 1970s and 1980s despair it has emerged to become a *40 billion industry employing nearly three quarters of a million people. Around 80% of production is exported, which also goes a long way in helping Britain’s balance of payments figure. Last year’s rise in sales was largely attributed to the widespread availability of good quality, low cost finance packages. Some commentators also suggested that compensation for miss-sold loan insurance also fuelled sales.
Other major manufacturers have joined Renault in predicting growth in 2014 well in excess of the SMMT figure. Vauxhall is Britain’s second biggest car seller and says it expects growth of around 8%. Nissan says it expects to equal last year’s growth and Toyota and Hyundai are forecasting growth of around 5%. These views are supported by analysts at KPMG, where partner, John Leech commented: “In my view these factors [favourable credit terms] will remain in place during 2014, suggesting that UK new car sales will rise between 5-10 per cent depending on the extent of manufacturer support.”
The UK is now the fastest growing car market and the second largest, behind Germany.
Posted by Edwin Miles on