UK Carmakers put foot down with over 526,000 new cars produced so far in 2023

UK Carmakers put foot down with over 526,000 new cars produced so far in 2023

31 Aug    Finance News, News

Car production increased by almost a third last month compared with a year ago taking factory output in the first seven months of the year to 526,000, up 14 per cent year-on-year.

The Society of Motor Manufacturers and Traders, the industry body, said that should put the sector on course to producing 860,000 vehicles in 2023 as a whole. That would be an increase of about 10 per cent on the 66-year nadir of 2022, when Britain’s factories produced only 775,000 cars, the worst performance since 1956, predating the launch of the Mini, the Jaguar E-Type and the Aston Martin DB5.

However, the society believes that the present rate of recovery in British car production will slow and that there is only a “possibility” that output will get back through the one million mark by 2028.

UK volumes fell below that level in 2020, the first year of the pandemic, when production declined by 30 per cent in the year to 920,000.

Before the 2016 decision to leave the European Union, British factories were producing 1.6 million cars a year, with forecasts that they could break through the two million mark. Since then, the Honda factory in Swindon, Wiltshire, has closed; the Ellesmere Port plant on Merseyside has stopped making Vauxhall Astras and has been adapted to produce lower-volume small electric vans; and production has halted at the Jaguar assembly line at Castle Bromwich in the Midlands.

In recent years, the British motor industry has been dominated by three manufacturers: Nissan, which has cut production by about a third at its Sunderland plant; JLR, the Jaguar and Range Rover combination that shifted production of its bestselling Land Rover Defender to Europe; and Mini at Cowley in Oxford, where production of the next generation of electric Minis has been switched by BMW, its parent company, to China.

The production data is a boost for the balance of payments, showing that four in five vehicles are bound for export, with the top destination markets being the EU, US, China, Japan and Australia, accounting for almost 85 per cent of all UK car exports last month.

The statistics also show how much greener British car assembly is becoming. Nearly two in every five cars produced is in some way electrified, such as Toyota’s hybrids made at Burnaston in Derbyshire and pure electrics like those produced by Nissan and Mini.

“Six months of growth shows that British car production is recovering and, with electrified models increasingly driving volumes, the future is more positive,” Mike Hawes, chief executive of the society, said.

Referring to the news that Tata, JLR’s Indian parent, is to build a “gigafactory” in Somerset making batteries for electric cars, Hawes said: “Recent investment announcements have undoubtedly bolstered the sector, but global competition remains tough.

“If we are to attract further investment and produce the next generation of zero-emission models and technologies, we need a coherent strategy that builds on our strengths and supports all aspects of advanced automotive manufacturing.”

The motor industry stands at a crossroads. From January 1, it will face a new zero-emission vehicle mandate that envisages fining manufacturers not selling 22 per cent of their inventory as battery-electric vehicles; and rules-of-origin regulations that entail cross-border tariffs if less than half a car’s components are not produced locally.

In addition, there has been speculation over whether the government is fully committed to its ban on the sale of internal combustion engine vehicles from 2030, talk that Hawes warned was “unhelpful” in attracting long-term investment.

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