UK’s car industry still challenged image

Although last year it posted its best results since 2007, making it the second largest car market in Europe, the industry in Great Britain has undergone such a rapid resurgence that it could soon be accused of becoming complacent about its future.

The UK will build more than 1.5 million cars this year, the most since 2007, and half a million more than it did just four years ago. But the overall figure masks problems such as stark differences between manufacturers, the depleted supply chain that feeds the car factories, and the UK’s heavy dependence on overseas markets and foreign owners.

“There is a momentum behind the industry at the moment,” says Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, the trade body that beats the drum for the industry.

By 2017, the SMMT says, the UK could be building a record number of cars per year and overtake France and Spain to also become Europe’s second-largest producer after Germany.

The industry is certainly in a better place than in 2006, but while headline figures demonstrate a sector that has its swagger back, the recovery is far from uniform. Of the roughly 200,000 increase in car production between 2011 and 2013, Jaguar Land Rover and Nissan accounted for 80 %.

Toyota, General Motors and Honda, the country’s fourth-, fifth- and sixth-biggest manufacturers by output, are all producing around 30 % fewer cars in Britain than they were before the financial crisis.

The erosion of the British car industry supply chain – the smaller companies that build the parts and electronics that go into the cars – is the biggest concern for executives and industry figures.

Via The Financial Times