Mixed Signals: SMMT UK Car Manufacturing Figures 2017

Data published in January by the Society of Motor Manufacturers and Traders (SMMT) reveals mixed signals regarding the state of UK car manufacturing. In 2017 1.67 million cars were built in the UK, a decline of -3%.

Within this decline there are two trends. Firstly there was a disappointing -9.8% fall in output for the domestic market, which the SMTT said was due to “the market responded to declining business and economic confidence and confusion over government’s policy on diesel.” Secondly exports also fell, but at a lower rate of -1.1%. Overseas demand dominates production, now accounting for 79.9% of all UK car output.

On the positive side the demand for British build cars grew rapidly in a few key overseas markets including China (+19.7%), Japan (+25.4%), Canada (+19.5%) and the US (+7%).

Demand for engines build in the UK also grew, both domestically and overseas. Output is up 6.9% to more than 2.7 million. 54.7% of these engines will end up in car and van factories around the world, mostly in the EU. The SMTT explains that this growth “is the result of significant investment in plants now producing high tech, low emission petrol and diesel engines.”

Commenting, Jeremy Lefroy said:

“It is of course concerning to see the decline in UK car manufacturing over the last year. Uncertainty over our exit from the EU, particularly in this age of just in time manufacturing, has not given a stable base for car manufacturers.

On the flip side these figures do say a lot about where we should be going with our car manufacturing. Firstly that there is still high demand in key overseas markets that we should be aiming towards, and secondly that technology is where we should be placing much of our plans for future growth and change within the market.”