UK automotive industry targets all-time manufacturing records

UK automotive manufacturers have set their sights on breaking all-time manufacturing records by the end of 2015. The confidence is fuelled by multi-billion pound investments committed to the country over the past 18 months that will see production expanded, new models introduced and thousands more people employed.

According to figures announced ahead of today’s SMMT International Automotive Summit, the UK could surpass the 1972 record of 1.92 million cars produced, with over two million units rolling off domestic manufacturing lines in 2015. This landmark relies on eurozone stability and ongoing government support and collaboration. Achieving annual car manufacturing volumes in excess of two million units would equate to an increase in manufacturing output of more than 50% over 2011’s level of 1.3 million units.

“The UK automotive industry is leading economic recovery with increased manufacturing output, growing export volumes and new jobs being created on the back of major international investment in the sector. Our engineering expertise, workforce flexibility and renowned motoring heritage, combined with top level collaboration between industry and government, makes the UK an important location for the global automotive industry,” said Paul Everitt, SMMT’s Chief Executive.

“The UK has attracted unprecedented levels of new investment and has a tremendous opportunity to see vehicle manufacturing rise to record levels in the years ahead. To remain globally competitive it is essential that industry and government continue to work in partnership and that key eurozone markets return to sustainable levels of economic growth,” continued Everitt.

Economic uncertainty across the eurozone is a factor that all businesses are watching closely. To a certain extent, the UK is insulated from the worst of demand fluctuations as it exports 40% of its products to countries outside Europe. However, it is clear that the ongoing stability and success of UK automotive is linked closely to demand from the continent.

The SMMT International Automotive Summit is the UK’s most high-profile meeting of industry leaders who attend to discuss key issues impacting the future growth of the sector. It will be held today in Canary Wharf. The 300-strong delegation will hear keynote speeches from Dr Ian Robertson (HonDSc), Member of the Board of Management of BMW AG, Sales and Marketing BMW and Peter Tyroller, Member, Board of Management, Robert Bosch GmbH. In addition, the day will close as Business Secretary Vince Cable describes how government is committed to supporting the sector and ensuring growth is sustained.

UK automotive manufacturing facts:

• Previous UK highest manufacturing volume: 1972 – 1.92 million cars.
• 2015 UK manufacturing potential volume: over two million cars.
• Over the first four months of 2012, car manufacturing was up 11.8% versus 2011.
• More than £5.5 billion has been invested in UK automotive in the last 18 months.
• On average, the UK manufactures 1.5 million cars and commercial vehicles and over 2.5 million engines annually, 80% of total vehicles and 70% of engines are exported.
• UK automotive is a vital part of the UK economy and typically generates around £50 billion in annual turnover, delivering around £10 billion in net value-added.
• Automotive is the UK’s largest sector in terms of exports and generates around £30 billion of annual export revenue. In a typical year, the sector exports to over 100 markets worldwide and accounts for around 11% of total UK exports.
• The automotive industry employs more than 700,000 people across manufacturing, retail and aftermarket sectors with approximately 145,000 people directly employed in manufacturing.
• UK automotive is at the forefront of the low carbon agenda, investing in R&D and new technologies that will deliver ever cleaner, safer and more fuel-efficient cars.

The UK is home to:

• Seven volume car manufacturers.
• Three volume commercial vehicle manufacturers.
• Eleven bus and coach manufacturers.
• More than 25 niche and specialist vehicle manufacturers.
• Around 2,350 component manufacturers, ranging from large companies competing globally to small and medium sized businesses (SMEs) actively involved in the UK supply chain.
• Eight Formula One teams and a large concentration of motorsport firms – found in Motorsport Valley.

UK-based volume car manufacturers:

UK automotive investment announcements in 2012:

• 17 May 2012 – Vauxhall confirmed £125 million investment to continue manufacturing at Ellesmere Port, Cheshire – creating 700 new jobs. New Astra production is set for 2015 with the plant running at full capacity on three-shifts. Vauxhall will also increase local supply content for the Ellesmere Port-built Astra to at least 25%.
• 11 May 2012 – Jaguar Land Rover commits an additional £1 billion to the UK automotive supply chain over the next four years, and announces a new logistics facility in Ellesmere Port, creating around 300 new jobs, managed by JLR’s logistics provider, DHL.
• 30 April 2012 – Honda confirmed 500 new recruits to begin work at its Swindon plant, production volumes forecast to double to 180,000 units with the addition of a second shift. A total of 3,500 employees now based at the plant.
• 10 April 2012 – Nissan confirmed production of an all-new hatchback model at its Sunderland facility from 2014, creating 225 jobs at the plant and 900 more in the supply chain. Investment in recent years at the Sunderland plant now exceeds £900m, and includes the introduction of the 100% electric Nissan LEAF in 2013, the Juke launch, the construction of a battery plant and the replacement Qashqai crossover.
• 4 April 2012 – Jaguar announced that it will build an all-new sports car, the F-TYPE, at its Castle Bromwich facility in the West Midlands.
• 23 March 2012 – Government announced the winning bids under the third round of the Green Bus Fund for hybrid, electric and gas buses. The £31 million fund will see 439 new low carbon buses come to UK roads, the majority of which are expected to be manufactured in the UK.
• 13 March 2012 – Jaguar Land Rover announced plans to expand its Halewood manufacturing facility, creating an additional 1,000 jobs to increase vehicle production.
• 5 March 2012 – Nissan announced production of an all-new model, the Nissan INVITATION, at its manufacturing facility in Sunderland creating around 2,000 new jobs at the plant and within its UK supplier base, representing an overall investment of £125 million.
• 13 January 2012 – McLaren Automotive announced plans to build a new facility in Woking for its F1 and sports car operations, creating 400 new jobs.

Full 2011/2012 investment announcement list at www.smmt.co.uk/industry-topics/uk-automotive/investment/