The Society of Motor Manufacturers and Traders’ car registration survey, released yesterday, showed healthy sales for UK manufactured cars. James Pozzi examines the British successes.
As 2014 approached faster than a British made Aston Martin, the resurrection of the nation’s automotive industry has been one of the country’s great manufacturing success stories. Fresh off the back of 2013, which saw further investments from Jaguar Land Rover (JLR), Nissan begin Note vehicle production at Sunderland, job creations at Toyota’s Deeside site and car exports hitting a record high, the turn of the year had more positive news in store.
Taking second spot
The Jaguar Land Rover success story – particularly in regards to driving employment and skills in the Midlands region – goes on with the announcement of its new i54 centre in Staffordshire. Not to mention the not-so-small matter of overtaking France to fill the number two spot in Europe’s automotive industry market, with the UK expected to be producing 1.92m cars annually by 2017.
Coinciding with this growth, yesterday’s announcement of the annual new car registration figures from The Society of Motor Manufacturers and Traders (SMMT), showed 2.265 million vehicles registered in 2013, the highest since pre-recession figures of 2007. This is in stark contrast domestically to last year – a rise of 10.8% – and with the rest of Europe, which has seen figures plummet during the same period.
UK new car registrations in 2013
UK new car registrations in 2013
Producing the goods
The SMMT figures not only show signs of a return to consumer confidence in the new car market, but illustrates the manufacturing capabilities of UK PLC. Among the findings were that one-in-seven, or 300,000, of the cars bought last year were built on these very shores.
This included two of the top six cars being manufactured in Britain. The Vauxhall Astra, which sold 68,070 cars last year, is manufactured at the car maker’s facility in Ellesmere Port on the Wirral where it employs more than 2,000 people.
The Nissan Qashqai, manufactured in Sunderland, sold a healthy 50,211. Much like the Midlands region which has benefited from JLR parent company TATA investing in its brands, the North East city saw large scale expansions to its workforce and facility from the Japanese company in 2013.
Tony Burke, assistant general secretary of Unite, believes the results are a testament to British manufacturing and the skills of the workforces assembling the vehicles. “Whether it’s a family car, a 4X4 or a luxury car, the UK is a world leader,” he says. “That’s a big thumbs up for the skills and expertise of the men and women working in the car industry in this country.”
For those outside of the top 10, there was still much to smile about. JLR’s brands saw sales rocket, in part due to demand from its overseas customer base. Land Rover notched up its best UK sales figures in more than 60 years, selling 55,000 cars in 2013. Jaguar also saw sales rise from 14,109 in 2012 to 16,210 in a year which saw the launch of its F-Type.
“JLR and Nissan accounted for around 80% of a 200,000 vehicle increase between 2011-2013, whereas companies such as Honda, the UK’s sixth biggest car producer, has seen production figures decline since 2007”
Toyota posted a further increase in its UK sales in 2013, with Auris, Verso and RAV4 delivering particularly strong results in some of the most competitive parts of the market. The second generation Auris hatchback – built at Toyota’s Burnaston, Derbyshire plant – enjoyed a successful first full year in the showroom since its launch in late 2012. Sales rose by almost two thirds year-on-year to 64.2 per cent, marking the largest year-on-year sales increase of any compact family hatchback.
Full speed ahead?
Despite the justifiable optimism, there will be inevitable challenges ahead for the UK market in 2014. The market is expecting a more modest growth of 1% this year. JLR and Nissan accounted for around 80% of a 200,000 vehicle increase between 2011-2013, whereas companies such as Honda, the UK’s sixth biggest car producer, has seen production figures decline since 2007.
John Leech, UK head of automotive at business services group KPMG, believes there are pitfalls in the way the cars are purchased through finance schemes, a factor credited for the sales surge. “The danger for car manufacturers and used car dealers is that the supply of three year old cars is starting to ramp up and, maybe in a year or two from now, will exceed demand leading to a potential residual value price crash and increased risk of loan default by consumers.”
The country’s miniscule automotive supply chain market also continues to raise concerns. Compared to counterparts across Europe and abroad, parts sourced in a country of origin are far fewer. It is inevitable that OEMs see attracting these European suppliers back to the UK, while attracting Tier One suppliers from further afield as critical to future prosperity. But while stories of factory closures and job losses have taken a backseat to regular stories of investment, job creation and skills initiatives, UK industry can’t afford to take its foot off the pedal.