Category Archives: UK Car Sales

2017 UK car manufacturing declines by -3% but still second biggest output since turn of the century

  • 1.67m cars built in the UK in 2017, a decline of -3.0% with production for domestic demand down -9.8%.
  • Car exports remain at historically high level, down just -1.1% with 1.34m shipped worldwide – 79.9% of total production.
  • British engine manufacturing at record-ever levels, with 2.72m produced, up 6.9% on 2016.
  • SMMT restates need for urgent clarity on Brexit transition, as new calculations show over 10% of exports could be at risk on 30 March 2019 unless we secure all current trading arrangements.

UK car production declined in 2017, according to the latest figures published today by the Society of Motor Manufacturers and Traders (SMMT). 1,671,166 vehicles rolled off production lines last year, a -3.0% decrease on 2016 and the first decline for eight years – but still the second highest output in 17 years.1

A -9.8% fall in output for the domestic market drove the overall decline, as the market responded to declining business and economic confidence and confusion over government’s policy on diesel. Exports also fell, though at a much lower rate, by -1.1%. Overseas demand continued to dominate production, accounting for 79.9% of all UK car output – the highest proportion for five years.2 The EU remained the UK’s biggest trading partner, taking more than half (53.9%) of exports, while the appetite for British-built cars rose in several key markets, notably Japan (+25.4%), China (+19.7%), Canada (+19.5%) and the US, where demand increased 7.0%.

Nevertheless, the latest figures is approximately 130,000 units below the mid-year forecast, given lower than expected demand primarily in the domestic market. This significant decline in production underscores the importance of government and industry working together to ensure the right conditions for the sector. The Industrial Strategy and, in particular, a Sector Deal for automotive are important but must be supported across government ensuring all policies align to the goal of a vibrant and growing industry.

The UK’s growing reputation as a centre for excellence in powertrain design and manufacturing, meanwhile, helped drive engine production to record levels. Demand for UK-built engines grew at home and overseas, with overall output up 6.9% to more than 2.7 million – with 54.7% destined for car and van plants around the world, the majority in the EU. The growth is the result of significant investment in plants now producing high tech, low emission petrol and diesel engines. Last year, more than 1 million diesel and 1.7 million petrol units were built in Britain, delivering £8.5 billion to the economy.3 These latest figures highlight the importance of diesel and petrol engine manufacturing in the UK – with some 8,000 people employed in engine production and 3,350 directly employed in diesel engine production.4

The news comes as UK Automotive restates the need for an urgent agreement on the terms of a post-Brexit transition deal. This must be comprehensive, result in no change and allow business to continue as usual until a new trading relationship with the EU is in place. This means maintaining the UK’s membership of the single market and customs union and addressing critical details that, if ignored, could have a damaging effect on the industry’s competitiveness.

The agreement must include guarantees that the UK will continue to benefit from EU Free Trade Agreements (FTAs) and Customs Union arrangements with third countries, for the full duration of transition. Latest SMMT calculations show more than 10% of UK car exports go to countries with which the EU has advantageous trading arrangements including South Korea, Canada, Turkey and, soon, Japan.5 Secondly, vehicle certifications that have been issued in the UK must remain valid at home and abroad so that vehicles can continue to be sold across the EU. Finally, no new customs checks, which would add cost, cause delays and disrupt manufacturing, should be applied during the transition.

Mike Hawes, SMMT Chief Executive, said,

The UK automotive industry continues to produce cars that are in strong demand across the world and it’s encouraging to see growth in many markets. However, we urgently need clarity on the transitional arrangements for Brexit, arrangements which must retain all the current benefits else around 10% of our exports could be threatened overnight.

We compete in a global race to produce the best cars and must continue to attract investment to remain competitive. Whilst such investment is often cyclical, the evidence is that it is now stalling so we need rapid progress on trade discussions to safeguard jobs and stimulate future growth.

Hawes spoke as SMMT also released new figures showing that UK automotive investment fell by 33.7% in 2017. Some £1.1 billion of investment earmarked for vehicle and supply chain manufacturing was publicly announced last year, down from £1.66 billion in 2016.

  1. Annual car production last declined in 2009. Total output was higher in 2016, and prior to that, in 1999
  2. In 2012, exports as a proportion of production was 82.7%
  3. SMMT calculations
  4. SMMT data
  5. Taking into consideration EU-wide trade deals in force and yet-to-be-ratified agreements, the UK automotive industry benefits from bilateral trade pacts between the EU and several of the sector’s top 10 export markets, including Turkey, Japan, Canada, South Korea and EFTA countries (Switzerland, Norway, Iceland and Lichenstein). Taken together, these countries cover more than 10% of UK automotive exports.

Source: SMMT

 

British car manufacturing rebounds in July as new models hit production lines

  • UK car output rises 7.8% in July as manufacturers ramp up production with new models.
  • After seven months of decline in the domestic market, production increases 17.7% ahead of number plate change in September.
  • Year-to-date performance remains strong, with production passing the one million mark and in line with expectations.

British car manufacturing rose 7.8% in July, with 136,397 new units rolling off UK production lines, according to figures released today by SMMT. Major carmakers ramped up production for new and existing models in the month ahead of summer factory shutdowns, which provide an essential period for plant maintenance, upgrades and re-tooling.

Production for the UK bounced back in July, in readiness for the important September market, following seven successive months of decline, rising 17.7% – an increase of 4,490 units – while exports also grew by 5.3%. Cars made for overseas buyers represented nearly 80% of output in the month with 106,525 units shipped abroad, compared with 29,872 which stayed at home.

Year-to-date new car production remains solid and has now passed the one million mark, though showing a slight dip of -1.6% compared with 2016, in line with expectations. Since January, overseas customers have taken delivery of 78.8% of new cars made in Britain, with UK manufacturers now exporting cars to more than 160 different countries around the world.

Mike Hawes, SMMT Chief Executive, said,

UK car production lines stepped up a gear in July, as usual bringing forward some production to help manage demand ahead of September and routine summer factory shutdowns. As the timing and length of these manufacturing pauses can shift each year, market performance comparisons for July and August should always be treated with caution, but as long as the economic conditions at home and abroad stay broadly stable we expect new car production to remain in line with expectations for the rest of 2017.

Source; SMMT

Record first quarter for UK used car market

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  • 2.1 million used cars sold in the UK in Q1 2017, a 3.4% rise on 2016, and the highest Q1 on record.1
  • Growth seen across diesel, petrol and electric/hybrids, up 5.6%, 1.6% and 43.2%.
  • Mini segment sees biggest growth, up 13.2%, but supermini still has most sales with 728,145.

The UK used car market got off to a strong start in 2017 with a record number of vehicles sold in the UK in the first quarter, according to data released by SMMT. 2,133,956 used cars changed hands in the first three months of the year, 3.4% more than in 2016 resulting in the biggest-ever volume seen in Q1.

Diesel and petrol sales remained steady, with gains of 5.6% and 1.6% respectively. Of the 851,569 used diesel cars sold in Q1, one in five were the latest low emission Euro 6 models. More motorists also took advantage of the wide range of alternatively fuelled hybrid, electric and hydrogen cars entering the second hand market, with registrations rising 43.2% to 21,320 units. This segment accounted for 1.0% of the market, compared with 0.7% last year.

The supermini segment continued to be the most popular, accounting for more than a third of the used car market, however, the mini segment was the fastest growing – with sales up 13.2%.

While silver remained the best-selling colour at 463,959 sales, figures show its popularity may be fading with sales declining -2.1%. White cars saw the biggest growth, up 17.1%, with used car sales echoing trends seen in the new car market in recent years.

Mike Hawes, SMMT Chief Executive, said,

A buoyant used car market combined with strong residual values is good news for the sector, with motorists benefitting from the wide range of models and high-tech safety and connected features entering the market. Diesel cars remain as popular as ever, with consumers now able to take advantage of the low emission Euro 6 diesels available in the used car market. It’s also positive to see sales of used electric and hybrid vehicles rise, reflecting what we have seen in the new car market. To ensure this growth is maintained and the benefits of low emission vehicles spread quickly throughout society, continued investment in infrastructure, incentives and a tax regime that encourages demand is essential.


Notes
1 SMMT used car sale records begin 2001. Second highest Q1 on record is 2016 with 2,063,674.