Auto Production Booming in the UK
It's no secret that the UK's automotive industry has been riding high for the last couple of years, emerging from the recession as one of the UK's greatest retail and manufacturing successes.
Not only are retail sales reporting 41 consecutive months of growth, but manufacturing output is at its highest since 2008. Figures show that three cars left UK production lines every minute for the first half of 2015.
793,642 cars were manufactured in the first six months of the year, an increase of 0.3% year on year, according to figures released by the Society of Motor Manufacturers and Traders (SMMT). Economically, the benefits are increased by strong export values, with 80% of UK-built cars destined for export. By contrast, domestic production is slightly down. On a monthly basis this June saw 5.4% more cars built than the same month last year, for a total of 143,759.
Not only are the physical numbers up, but so is productivity. Each employee added £100,000 of value to their output in 2014 - 35% higher than 2010's £74,000 and double the UK average.
The good news continues as big names announce further investments in the industry to enable new-model production. The SMMT believes that the UK's growing global importance in the auto industry represents the quality of a highly skilled and dedicated workforce plus advanced and efficient production methods. Industry investment combined with the government's commitment to supporting the industry have put the UK at the forefront in the development of modern automotive technology and made the industry competitive on an international scale.
While venerable British brands are soaring ahead in such a conducive environment, the UK has a number of international names to thank for its current success. Nissan is a case in point, building its Qashqai, Juke, Leaf and Note models in its mighty Sunderland facility, while Honda and Toyota have also taken advantage of Britain's highly skilled automotive workforce.
In the meantime, Indian-owned Jaguar Land Rover has been consolidating its British heritage with huge investments in research and development and the production of its XF, XJ, XK, F-Type, Evoque, Range Rover, Range Rover Sport, Defender, Discovery and Freelander models in the West Midlands.
Vauxhall is another excellent example, and domestic demand is keeping its Luton facility operating at almost full capacity. The brand believes business customers are driving trade, with the Vivaro van produced at the plant. Big companies such as Royal Mail and British Gas were named by Vauxhall as buyers that want to buy British and are choosing the Vivaro to update their fleet. Vauxhall is looking forward to further success with the introduction of an all-new Astra model shortly, while the recently updated Corsa supermini has increased the previous model's sales volumes.
Vauxhall's pre-tax profits were reported at £41 million for the second half of 2014, against £1.9 billion in sales. That's a massive improvement on the preceding half year's loss of £53.8 million. Britain is the largest European market for Vauxhall's parent company, General Motors.
Meanwhile, the SMMT has reported new car registrations were up once again last month to 178,420 units. That's an increase of 3.2% year on year and taking registrations for the year to date up by 6.5% on the same period last year. More than 1.5 million new cars have been registered so far this year - a record high. In particular, consumers have been going for superminis, small family cars and SUVs. The dual-purpose sector, which encompasses SUVs and crossovers, has in fact grown by 88.5% since 2005, as consumers fall for their versatility. The supermini sector has grown by 22.7% over the same period, reflecting a rise in quality in smaller cars, which are now equipped with the sort of driver-assistance features and performance that used to be reserved for larger, more expensive cars.
While July's new car registrations continue to be strong, growth is slightly subdued as predicted by the SMMT. Attractive finance deals and exciting new model releases continue to buoy demand, but the long-term picture appears to stabilising and settling at a more sustainable level.