UK Car Industry Smashes Export Records
Figures from the Society of Motor Manufacturers and Traders (SMMT) have revealed that nearly eight in every ten cars made in the UK is being exported to overseas customers, with an incredible five million vehicles being sold abroad since 2010.
Figures from the Society of Motor Manufacturers and Traders (SMMT) have revealed that nearly eight in every ten cars made in the UK is being exported to overseas customers, with an incredible five million vehicles being sold abroad since 2010. The industry is now exporting cars at a record level, with strong international demand for Britain’s luxury marques being especially evident. The export trade is part of a wider renaissance of car manufacturing in the UK, with billions of pounds worth of investment being injected into UK plants by their foreign owners. Premium brands such as Jaguar Land Rover and Bentley are performing particularly well but they are being joined in the export race by mass market manufacturers such as Nissan and Toyota.
According to the SMMT, around 1.6 million cars will be made in the UK during 2014. The industry predicts that this figure will rise by 2017 to break the record of 1.92 million cars manufactured in the UK, set in 1972. In July of this year, car manufacturing output in the UK increased by 2.8% to a total of 132,570. In the first seven months of 2014, the running total for the year is 923,884, up by 3.4% on the same period last year.
SMMT chief executive, Mike Hawes, greeted the news, saying: "The UK car industry continued its renaissance in July, with the month marking five million car exports since 2010. This is a major milestone and testament to the growing reputation of UK automotive excellence and demand for British-made cars."
The government is especially keen on promoting the UK car industry as evidence of the success of its efforts to rebalance the economy away from the service industries and towards manufacturing. It also wants to replace debt-fuelled public spending with exports and manufacturing. Chancellor, George Osborne, has made it clear that he sees an increase in exports as key in the UK’s continued recovery and in 2012 he set a challenging target of doubling UK exports by 2020 to £1 trillion.
It is true that the largest export market for UK-built cars is the EU. But since 2010, China and Russia have become the second and third largest markets, pushing the US down into fourth place. The rise of China as an export market is particularly striking, with the country not even featuring in the top ten just a decade ago.
Professor of industrial strategy at Birmingham’s Aston Business School, David Bailey, commented on the figures, saying that there were a number of different factors involved in the continued success of UK car making. He said: "It has bounced back quickly since the severe downturn in 2009, helped by the exchange rate depreciation, world-class manufacturing, excellent industrial relations and to an extent the government's industrial strategy."
Bailey went on to say that the car industry was well-positioned to take advantage of the growing middle classes in the emerging economic powerhouse countries of China and Russia, where the positioning of UK brands in the prestige sector is especially appreciated.
Another survey, carried out by courier firm DHL and the British Chamber of Commerce (BCC) revealed that exporters in the UK are increasingly confident about the prospects for business in the coming 12 months. The study found that 70% of businesses believed their exports would increase over the next 12 months, representing an increase of 10% for the same period last year. BCC director general, John Longworth, welcomed this news but cautioned that more action was needed to encourage UK companies to export.
He said: "If we are going to reach the government's target of increasing exports to £1tn by 2020, the UK should be matching the level of resourcing dedicated to export support provided by our major international competitors." Longworth concluded: "As a nation we can and must do more if we are to remain competitive and stand a chance at rebalancing the UK economy for the long term."