UK car sales are at a six-year high as the British industry continues to register strong month-on-month growth.
The figures come from Clearwater Corporate Finance, which analysed the performance of the industry in its new Global Automotive Report.
The full-year UK car sales forecast in 2013 is 2.1 million, a 3 per cent increase on 2012 as the industry looks to reach the pre-recession peak of 2.6 million. Ford has retained its market leadership selling one in every seven cars in the UK. The fastest growing sales among big manufacturers include Vauxhall, Jaguar Land Rover (JLR), Honda and Mini.
Constantine Biller, partner at Clearwater Corporate Finance said: “The UK’s performance is all the more impressive when compared to the wider continent. Annual car sales in Western Europe have fallen by almost a quarter since 2007, and are forecast to continue falling to 12 million in 2014 from 13.2 million in 2012.”
The UK has seen particular success in exporting to China, with Chinese exports growing from 1.4 per cent in 2008 to 8.1 per cent in 2012.
Constantine said: “The UK’s focus on emerging markets has been the key to its success. For instance Russia now accounts for 10.6 per cent of all exports, growing from 3.8 per cent in 2009.”
Conversely, exports to the EU have fallen by almost 10 per cent since 2008. However, they have accounted for 51 per cent of total exports during 2013 to date.
One of the shining lights in the UK automotive market is JLR. Since 2008 it has increased its workforce by two thirds, and now employs more than 20,000 in the UK. Last year JLR built 350,000 cars in Britain with 80 per cent of them exported to more than 170 countries.
Constantine continued: “Nowhere is the revival of the UK automotive market better illustrated than in the transformation of JLR since its acquisition by the Indian Tata Motors group in 2008. Its production forecasts are for 390,000 cars this year and 640,000 by 2016. Its model has worked flawlessly and others in the sector should look to follow suit.”
Growth in the entire automotive supply chain has been key to the UK renaissance. This in turn is spurring mergers and acquisitions (M&A) activity as UK players become key targets. Recent deals in the supply chain include investment into VTL Automotive Ltd by the Business Growth Fund, plus the acquisition of Covpress Holdings Ltd by Shandong Yongtai Group Ltd.
Constantine concluded: “The most success comes from those that operate on a global scale, so automotive component suppliers should be looking to expand internationally, particularly with JLR now establishing car plants in both China and India. Both acquisition and joint ventures are viable options. Alternatively, UK suppliers might look to sell to a global player with worldwide operations.”
Clearwater’s Global Automotive Report is available here.