The decrease in British-built cars is chiefly down to less demand in the UK, while warnings about the effects of Brexit continue

The UK car industry faces “the greatest challenge of our time”, according to the Society of Motor Manufacturers and Traders chief executive Mike Hawes, referring to ongoing uncertainty over Brexit and the anti-diesel rhetoric in the UK.

“[Brexit] comes at a time when the global car industry faces so many challenges. Our global competitors are focusing on electric and autonomous vehicles when, in the UK, we’re focusing on Brexit and air quality,” said Hawes.

New car sales fall 5.7% in 2017

Figures from industry body, the Society of Motor Manufacturers and Traders (SMMT), show that 1,671,166 cars were built in the UK in 2017, down from 1,722,698 in 2016. That represents a fall of 3.0% compared to 2016 - the first decline in eight years - but still remains the second biggest year for production since the turn of the century. 

The downturn in production is largely attributed to poor domestic demand thanks to “declining business and economic confidence and confusion over government’s policy on diesel”, said the SMMT.

The winners and losers in 2017's UK car market

Jaguar Land Rover retains top spot

Jaguar Land Rover remains the biggest manufacturer of British-built cars for the third consecutive year, despite being down 2.3% year-on year and despite recently confirming it is cutting shifts at its Halewood plant due to concerns over Brexit and diesel demonisation. It made 532,107 vehicles last year across its Birmingham and Liverpool sites, led by the Range Rover Sport and Jaguar F-Pace

Nissan took the second spot, down 2.4% on 2016 with 495,206 vehicles made, led by the popular Qashqai. Mini was third biggest producer, followed by Toyota, Honda and Vauxhall

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Honda had its most successful year, thanks to its new Civic, with production up 22.4% to 164,160 units. Worst hit was Vauxhall, whose production was down 22% to 92,164 cars. Toyota also dropped 20% to 144,077 units built.

The top ten cars sold worldwide and built in Britain were, in descending order, the Nissan Qashqai, Mini hatchback, Honda Civic, Toyota Auris, Vauxhall Astra, Nissan Juke, Range Rover Sport, Jaguar F-Pace, Range Rover Evoque and Land Rover Discovery Sport

Of the overall 1.67m vehicles, 1.34m were sold outside the UK. Car exports were down 1.1%, only a slight decline when compared to cars built for the UK market, which dropped 9.8%.

This reflects the decline in UK car sales, which fell 5.7% in 2017, a result also blamed on falling consumer confidence, concerns over diesel and worsening exchange rates.

Brexit concerns

Reiterating the SMMT’s previous stance on Brexit, Hawes said: “The EU remains our biggest partner for exports. The EU market is getting back to pre-recession levels. We must maintain the relationship with not only Europe, but all countries. 

“Businesses need clarity, not just on the Brexit transition but also the long-term arrangements. The single market must continue, and there must be no tariffs. Anything else would undermine our competitiveness.”

Hawes expects UK car production for 2018 to stay at a similar level to last year, his tone notably different to this time last year when he described the industry as being “in rude health” and predicted that the all-time record of 1.92m British-built cars, set in 1972, would soon be beaten.

When asked today about hitting that record, Hawes commented: “it’s hard to foresee us reaching that figure while we have this period of uncertainty”.

JLR CEO Ralf Speth expressed caution on the firm's prospects for 2018: “The car industry is facing a number of challenges that are undoubtedly impacting consumer confidence, particularly in the UK. Jaguar Land Rover must become as lean and fit as possible so that we can continue to invest in our autonomous, connected and electrified future," he said.

Meanwhile, Honda expects to maintain 2017 levels for production this year. 

Hawes also predicted that shortly before leaving the EU, there would “likely be a pull-forward” in terms of car production, followed by a decline directly after Britain’s exit. 

Ford’s UK boss Andy Barratt added: “The car market involves global players. So global capital goes to safe havens: the places where you will get the greatest returns. The free trade agreement is key, plus a stable currency, stable regulations."

The SMMT also confirmed that UK automotive investment fell by 33.7% last year to £1.1bn, compared to £1.66bn in 2016. Investments in 2017 included McLaren’s Sheffield facility and Toyota’s Burnaston plant.

Engine production bucks trend with 6.9% rise

Despite the downturn in investment and car production, engine production bucked the trend, hitting record levels. Output was up 6.9% to more than 2.7m units in 2017, with 54.7% of these destined for overseas sale. 

More than 1m diesel and 1.7m petrol units were built last year, delivering £8.5bn to the economy and creating 8000 jobs, according to the SMMT. 

Ford UK boss Andy Barratt, added that Ford’s engine plant in Dagenham had made 793,200 engines in 2017, an increase of 10,500 over 2016 “despite fragile demand and anti-diesel rhetoric”. This success was largely down to its Transit van.

Read more

New car sales fall 5.7% in 2017

The winners and losers in 2017's UK car market

Touring Britain's car industry

UK car manufacturing hits 17-year high in 2016 - JLR and Nissan rank top

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Comments
20

31 January 2018

Why won't Mr Hawes respect the outcome of the EU referendum?

Leaving the EU will allow the UK to increase its competitiveness.

Nissan demanded that the UK should join the Euro currency. The UK did not join the Euro currency and Nissan is still in the UK.

It is just a bluff. These car manufacturers will still be in the UK after the UK has left the EU.

31 January 2018
max1e6 wrote:

Why won't Mr Hawes respect the outcome of the EU referendum?

Leaving the EU will allow the UK to increase its competitiveness.

Nissan demanded that the UK should join the Euro currency. The UK did not join the Euro currency and Nissan is still in the UK.

It is just a bluff. These car manufacturers will still be in the UK after the UK has left the EU.

its more the fear of the unknown, that first tentative step into a new World, most are apprehensive right now, would prefer to go back to pre Brexit because it was a known,also, if and when we leave Europe will have its Brexit, things aren’t exactly Rosie there just, there life’s are going to change struggle too.

Peter Cavellini.

31 January 2018

 

[/quote]its more the fear of the unknown, that first tentative step into a new World, most are apprehensive right now, would prefer to go back to pre Brexit because it was a known,also, if and when we leave Europe will have its Brexit, things aren’t exactly Rosie there just, there life’s are going to change struggle too.

[/quote]

Our Car Industry was not very good when we went into the Eurozone as before and just after WW2 we always were trading cars for wheat/oil etc.. globally and thought that would go on for ever but the world changed. So Post Brexit is an unknown quantity with no Government owned car industry to go on wasting money it is market related now.

Also the threat of interest rate increases in the near future mean folk are being cautious all round with expenditure. So all in all not a good environment for cars sales diesel or otherwise really

31 January 2018
max1e6 wrote:

Why won't Mr Hawes respect the outcome of the EU referendum?

Leaving the EU will allow the UK to increase its competitiveness.

Nissan demanded that the UK should join the Euro currency. The UK did not join the Euro currency and Nissan is still in the UK.

It is just a bluff. These car manufacturers will still be in the UK after the UK has left the EU.

Leaving the EU will not allow the UK to increase its competitiveness. Our productivity is way below several other EU countries. Our problems are more deep rooted than that.

Why does saying that the outcome will be bad for business imply a lack of respect? One could argue that the election of Labour goverments in the 60's was bad for UK car industry. One could argue that the election of Conservative governments in the 80's was bad in another way. Democracy was still respected. There's a line in the film "Gandhi" where he says something like "India would rather govern itself badly rather than be governed well by a foreign power". My apologies of that's not exact, but it was something like that.

The other great thing about democracy is that stupid decisions can sometimes be reversed. In 5-10 years, a lot of people who voted to leave will have died and those who have turned 18 are more likely to vote to re-enter the EU. Another good thing about democracy is that we can read and re-read what was on the ballot sheet. It was a vote to leave the EU, not the single market.

Happy motoring

31 January 2018

'Leaving the EU will not allow the UK to increase its competitiveness.' The Hungarian economy minister disagrees with you. He has stated that the UK will be able to increase its competitiveness after it has left the EU and that Hungary is concerned about losing some of its competitive advantages. There is a video on Youtube with the interview.

Mr Hawes wants the UK to remain in the EU single market. We were told that voting to leave the EU would mean leaving the single market and leaving the customs union. We voted to leave the EU, leave the EU single market and leave the EU customs union and end freedom of movement of labour. So Mr Hawes is not respecting the outcome of the EU referendum.

You are a just a Remainer. The idea of people dying seems to make you excited and happy - there is something wrong with you.

In the near future, lots of people who voted to remain in the EU dictatorship will also die.

 

289

31 January 2018

Quite agree Max....same old line has been trotted out by Mike Hawes so many times now that even his closest supporters must be bored by now.

Not one of my many friends who have changed their car in the last 6 months have brought Brexit into their purchase decision....a few have dumped diesel (penny dropped), many have bought pre-reg cars with less than 1000 miles on the clock.....and here I believe is part of the issue. Why would you buy a brand new car and hand over a chunk of your hard earned money to the Government with inflated first registration VED?....something which will be aggravated even more this April.

This merely educates the buying public even more to buy late used/pre-reg (of which there are unlimited numbers to choose from),, particularly with larger cars/SUV's.

31 January 2018
Earnings have been squeezed for years. Not just in the UK but across the West. Plus long term over production.

31 January 2018
Except higher VED and insurance premiums. Owners are settled with their 3 year old motor that ticks all necessary boxes. What's the point in suffering even more depreciation?

31 January 2018

Cars are to well built, secondhand ones are cheap and offer excellent value for money and people are beging to realise this. There's loads of them around owing to cheap finance a few years ago.

"Our global competitors are focusing on electric and autonomous vehicles when, in the UK.."

Really where in Europr is the best selling Electric LEAF made, autonomous?? really who's focusing on that then! 

typos1 - Just can’t respect opinion

31 January 2018

SMMT have every right to express concerns about Brexit. The consequences of a bad outcome are potentially disastrous for UK car manufacturing.

 

As for ‘diesel demonisation’ - have a word. Autocar is failing its readers by spouting industry propaganda here.

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