Exports remain the driving force for UK’s soaring car production

By GARETH MACKIE
Published on 15/06/2012 00:00

Car production in the UK reached an eight-year high last month as strong export demand contributed to a 42 per cent jump in output.

The Society of Motor Manufacturers & Traders (SMMT) yesterday said 141,146 cars were built in May, the highest figure for the month since 2004, with exports accounting for the vast majority of the total.

Some 120,120 of the motors constructed last month were destined for overseas markets, an increase of 45.5 per cent on the same month last year.

In the year to date, car production has increased by 17.3 per cent to 636,923 vehicles.

The UK’s car manufacturers have set themselves a target of breaking production levels within three years as a result of multi-billion pound investments in the industry, which employs more than 700,000 people and accounts for around 11 per cent of the country’s total exports.

According to SMMT figures, the UK could surpass the 1972 record of 1.92 million cars produced, with more than two million units rolling off domestic manufacturing lines in 2015.

Paul Everitt, the trade body’s chief executive, said yesterday’s figures marked a “sizeable recovery” from May 2011, when manufacturers’ supply chains were disrupted by the earthquake and tsunami in Japan.

He added: “This boost, coupled with robust year-to-year results, demonstrates the strength of the UK automotive manufacturing industry and shows why it continues to attract high levels of international investment.”

Earlier this week, German car giant BMW said it would build the engines for its forthcoming i8 hybrid sports car at its Hams Hall plant near Birmingham. The group plans to invest £500 million in the UK over the next three years, safeguarding 800 jobs at the plant.

The SMMT said UK engine manufacturing increased by 13.4 per cent to 242,937 units in May, taking the total for the year so far to 1.1 million.

However, Everitt said “restrained levels of demand” meant the number of commercial vehicles built last month fell by 7.4 per cent to 9,445. The number of commercial vehicles produced for the domestic market fell 18 per cent, while there was little change in exports, which account for more than 60 per cent of output.

Last week the SMMT said car sales in the UK rose almost 8 per cent – the largest increase for almost two years – boosted by 14.3 per cent growth in private sales. However, the number of cars registered in Scotland dipped to 13,082, down from 13,115 a year earlier.

The largely foreign-owned car industry has been a rare bright spot in the British economy, with Jaguar Land Rover (JLR) and Nissan among those expanding their workforces.

JLR is creating 1,000 jobs at its factory in Solihull near Birmingham as part of plans to launch 40 products over the next four years and is building a £355m engine plant in Wolverhampton.

Nissan recently announced plans to build a new hatchback at its Sunderland plant in 2014, creating more than 1,000 jobs at the site and along the supply chain.