Member Article

Car manufacturing rises in January

Car manufacturing rose by 1.2% in January to 129,049 units despite a turbulent year for the industry in 2012.

With a raft of jobs cuts, job creation and production halts over the past 12 months, the automotive industry’s path has not been easy.

However, figures from the Society of Motor Manufacturers and Traders (SMMT) showed that strong domestic demand was met with a 26.1% rise in output of cars built for the UK market.

Exports were also strong in the first month of the year, with 79.1% of cars produced being sent out of the country.

Mike Baunton, SMMT’s interim chief executive, commented: “UK car manufacturing grew modestly in January, up just 1.2% on the same period in 2012.

“Output is typically subdued in January as manufacturers extend holiday periods to upgrade plants and re-tool for new models.

“Despite ongoing economic challenges, growing demand for UK-built products in emerging global markets coupled with major new investment is paving the way for a positive year for automotive manufacturing.”

Independent analysts of the car market said UK automobile manufacturing could expand by a third by 2016, with output nearly at 2m vehicles a year.

KPMG’s UK head of automotive, John Leech, commented: “This is a resilient performance by the industry in light of the dramatic fall in car sales throughout the Eurozone.

“This resilience is borne from the fact that the UK exports a greater share of its vehicles to high-growth emerging markets than any of its European competitors.

“A small fall in production had been anticipated in January, so this increase, albeit minor, suggests the industry is feeling confident about strong UK car sales when the new registration plate changes in March 2013.

“And of course the bigger picture is that short-term Eurozone demand weakness will not derail the medium-term prospects for the UK car industry which remain bright and I still expect total UK vehicle production to hit the 2 million mark in 2016.”

This was posted in Bdaily's Members' News section by Miranda Dobson .