The figures, released today, show that UK car manufacturing achieved its 12th consecutive month of growth in July, with year-to-date production growing by 12.3% to 1,023,723 units – the first time in 12 years that volumes have surpassed one million in the first seven months.
The most popular models produced in the UK include the Nissan Qashqai, built at the brand’s Sunderland plant, with a volume of 298,947. The Toyota Auris is the second most popular model built in the UK, with a volume of 147,907 (less than half that of the Qashqai). The Nissan Juke comes in third place, with a production volume of 119,065.
Demand in July was up both at home and abroad, with a 14.1% increase in output for the domestic market. Exports are up 6% to 101,184 units, with 77.8% of cars produced destined for overseas markets.
The automotive industry is a vital part of the UK economy, accounting for more than £71.6 billion in turnover. A total of 814,000 people are currently employed in the automotive industry across the UK, with 169,000 people employed directly in manufacturing. It accounts for 12.0% of total UK export of goods and invests £2.5 billion each year in automotive R&D, with more than 30 manufacturers building in excess of 70 vehicle models in the UK.
In 2015, UK automotive manufacturers produced 1,682,156 vehicles, with 1,587,677 of those being cars. Today’s figures show that UK car production is on track for 2016 to beat last year’s figures.
Any impact from Brexit is yet to be seen, with a strong order bank still in place from prior to the June referendum. If there is any effect on UK car production figures from Britain's expected departure from the EU, it is likely to be felt in the coming months and years.
SMMT chief executive Mike Hawes said: “UK car production in 2016 is booming, with new British-built models in demand across the world. Manufacturers have invested billions to develop exciting new models and produce them competitively here in the UK.
“Future success will depend on continued new car demand and attracting the next wave of investment, so Britain must demonstrate it remains competitive and open for business.”
However, director of strategy at Close Brothers Motor Finance, Chris Bosworth, thinks the boom may well be coming to an end. He said: “Today’s figures for production in the car manufacturing industry continue to emulate the volumes we have seen over the last year, with production and output accelerating at unprecedented levels. However, as figures revealed earlier this week show, there are a number of factors that indicate this growth may be coming to the end.
“The steady flood of new cars that have entered the market over the last year has resulted in a glut of used vehicles beginning to emerge, with these two or three-year-old cars making consumers gravitate to well-priced ‘nearly-new’ stock. At the same time exchange rate movements make the UK a less attractive place to sell cars meaning that manufacturers are less inclined to subsidise finance on new vehicles.
“The outcome of Brexit is also beginning to affect foreign-based manufacturers, with announcements that many are reducing staffing hours as a result of the fall in the pound from Brexit. This gives UK exporters a boost. However, the profits of these firms are likely to fall unless they increase prices of new vehicles, which will again reduce demand-side pressures on UK car manufacturers.”