Weak demand from Europe fails to put the brakes on UK’s car industry

By SCOTT REID
Published on 18/01/2013 00:00

Europe’s economic woes have failed to dent the British motor industry, with car production hitting a four-year high, according to new figures.

Yesterday’s report from the Society of Motor Manufacturers & Traders (SMMT) also revealed that the number of cars made for export reached an all-time high last year.

Britain’s car industry has been enjoying a renaissance with strong export sales of models from brands such as Jaguar Land Rover, Mini and Nissan to buoyant markets in Asia, eastern Europe and the United States.

However, the sector was rocked last week after Japanese giant Honda announced it was axing hundreds of jobs at its Swindon plant to cope with a sales slump in mainland Europe.

The SMMT data showed that a total of 1,464,906 cars were made in the UK in 2012 – a 9 per cent hike on the 2011 figure.

Of these, more than 1.21 million were made for export – a 7.8 per cent increase on 2011 and the best year ever.

Commercial vehicle (CV) production fell back last year, dipping 6.8 per cent to 112,039.

Engine production, at just under 2.5 million, was 0.3 per cent down on the 2011 total.

The year-end car production total was boosted by a 6.2 per cent rise in December, compared with December 2011, but CV output tumbled almost 19 per cent in December 2012.

SMMT chief executive Paul Everitt said: “2012 was a very good year for UK car production with record levels of exports and volumes at their highest since 2008.”

He added: “The outlook for 2013 remains positive with demand in many faster-growing global markets offsetting the continued weakness in European economies.

“The £6 billion of investment committed to UK facilities, new model programmes and research and development signals a bright future and many new opportunities for companies in the supply chain.

“These remain extremely challenging times and it is essential industry and government continue to work together to secure long-term industrial growth.”

Business Secretary Vince Cable said the figures were “a great tribute to our manufacturing strengths, particularly in the face of challenging trading conditions in Europe and strong international competition”.

He added: “The UK is achieving success by making products that are in demand across the world. We have a diverse and innovative automotive sector with some of the most productive plants in the world and a flexible, skilled and committed workforce.”

Figures released earlier this month by the SMMT showed that Scottish car dealers enjoyed their strongest sales in five years despite an end-of-year blip. ­Industry leaders forecast a “settled” market in 2013, after it was revealed that just under 182,000 cars were registered north of the Border last year, a rise of 9 per cent on 2011.

Across the UK, more than two million new cars were sold last year, a rise of 5.3 per cent on 2011 and the highest since 2008.

In stark contrast, car registrations across the EU fell by 8.2 per cent in 2012, hitting their lowest level since 1995, the European Automobile Manufacturers’ ­Association revealed.