38 motoring special


Car manufacturing goes from strength to strength


Last year UK car production topped 1.5 million units, reaching its highest volume since 2007, as John Burbedge reports


Industry analysts predict output could reach record levels of around two million units by 2017 and the UK could become the third largest car manufacturer in Europe.


“The car industry is going from strength to strength – with one vehicle rolling off a UK production line every 20 seconds”, said business secretary Vince Cable commenting on 2013 figures supplied by the Society of Motor Manufacturers and Traders (SMMT).


The automotive sector provides a £59 billion turnover and £12b value added to the UK economy. More than 700,000 jobs are dependent on the industry.


It also accounts


for 10% of UK exports and on average invests £1.7b each year in R&D. In 2013, UK automotive investment announcements actually exceeded £2.5b.


Mike Hawes, SMMT chief executive, said: “2013 demonstrated the value of the UK’s diverse car manufacturing industry, as surging home demand and robust exports outside Europe saw output grow 3.1%.


With major investment in the industry over the past two years, and four out of five vehicles now exported to 100 countries worldwide, the automotive sector has transformed itself into a UK success story.


Vince Cable added: “Our success lies in the appetite from countries around the world for British cars. Around 80% of the 1.5 million cars we produced last year were exported – a testament to the diverse, high quality of British manufacturing.”


“It also highlights the benefits of industry and government working together and we want to continue this partnership strategy long-term. This will give businesses the confidence to invest, speed-up development of future vehicles, and keep the UK as a world leader in cars.”


A noticeable factor over the past five years has been the change in export destinations. Emerging economies such as India and China have rapidly increased demand for UK-built cars. China looks set to become the largest non-EU export market.


Sales in the United States remained strong in 2013, and Russia is now firmly established as a key export destination.


The industry’s progress and changing export focus was ably demonstrated by Britain’s largest car manufacturer Jaguar Land Rover (JLR) when it reported record-breaking worldwide sales for 2013 in 38 countries


www.businessmag.co.uk 'Line Off' event for the mass production launch of the new Civic Tourer


The UK motor sector’s recovery is outpacing the rest of Europe, but this is somewhat a double-edged sword, according to the BDO Motor 150 Report team.


Elsewhere in Europe car sales have been falling. Spain registered a 2.1%, sales growth thanks to a scrappage scheme, but German, French and Italian markets all shrank.


As a result, manufacturers increased their car quotas into the UK in 2013, which challenged dealers with increased volume targets and led to vehicle margin erosion.


Although Ford Transit manufacturing ceased in Southampton in July 2013 with work moving to Turkey, other car manufacturers in our Business Magazine’s Thames Valley and Solent region have invested and boosted their UK operations.


MINI Plant Oxford benefited from the lion’s share of a recent £750m investment to make facility improvements and prepare for the new MINI Cooper on sale this spring.


In Swindon, Honda of the UK Manufacturing (HUM) has invested £2b on its 370-acre site since the company was created in 1985.


HUM’s continuous investment was highlighted in 2012 with a £267m programme devoted to new models and engines.


A Civic Tourer model has just started production at Swindon and a new Civic Type R is expected to follow in 2015. HUM’s latest model, the Civic Tourer was “designed, developed, tested and produced in Britain to exceed customer expectations all over Europe".


Swindon is Honda’s main manufacturing site for the European market – 94% of UK-bought Hondas are built in Swindon.


High performance standards are a constant objective for Honda Swindon’s 3,200 employees since they compete with Honda factories worldwide on efficiency and quality.


In association with and THE BUSINESS MAGAZINE – THAMES VALLEY – MARCH 2014


and international markets. JLR demand rose sharply by 19%. In the UK too, Jaguar sales were up 15% and Land Rover increased 13%.


While JLR has also announced a £500 million investment in low-emission engines, it is worth noting that the company, taken over by Indian firm Tata Motors in 2008, had sought government bailout funds during the economic slowdown.


Plant Oxford investment has included a state-of-the-art bodyshop using 1,000-robots, together with substantial paintshop and assembly hall upgrades. MINI Plant Swindon, manufacturing body pressings and sub- assemblies, has also received upgrades.


“Our investment, up to 2015, underscores the importance of the MINI within our global production network. The UK is the heart of MINI production – thanks to the experience, competence and strong commitment of all our employees,” said Harald Krüger of BMW Group, who own MINI.


The 200-acre Oxford production site celebrated its centenary in 2013. It currently employs around 4,000, and produced 175,986 cars last year.


Up to 900 MINIs are produced every day and 2.4 million have now rolled off the assembly line since 2001.


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