Automotive industry 'remains positive' but could face slow demand, fierce competition and tougher European policies

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Automotive industry 'remains positive' but could face slow demand, fierce competition and tougher European policies

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Published: 25 January 2013

THERE are mixed views on how the automotive industry in the UK could look by the end of the year, with SMMT's Paul Everitt saying he 'remains positive' while Hyundai, the fastest-growing automotive brand in the world, says manufacturers could face a barrage of strict government policies which may slow demand across Europe.

Having attracted in excess of £6 billion in investment for manufacturing facilities, new model programmes and Research and Development in recent years, Britain's automotive industry is a clear government priority and a fast-growing one - particularly as it contributes around £55 billion to the UK economy annually. "It signals a bright future and many new opportunities for companies in the supply chain," explained SMMT chief executive Paul Everitt.

Nissan Sunderland

Nissan produced a record number of cars last year from its factory in Sunderland.
The number of vehicles built on British soil last year increased by a staggering eight per cent on 2011. Around 82 per cent of these 1.46 million cars built on British soil last year were sent abroad.

Experienced business secretary Vince Cable praised the automotive sector and the achievements of its 'flexible, skilled and committed workforce'.

Nissan Sunderland

He said: "News that UK car production increased by eight per cent in 2012 and exports are at record levels is a great tribute to our manufacturing strengths, particularly in the face of challenging trading conditions in Europe and strong international competition.

Land Rover (305,467 UK cars built), Jaguar, Nissan (510,572 UK cars built), MINI (207,530 UK cars built) and Hyundai all proved last year that investment really does pay off - with record sales throughout the year, driven by innovation and new products including the Range Rover Evoque and the Nissan Qashqai.

Mr Everitt added: "2012 was a very good year for UK car production with record levels of exports and volumes at their highest since 2008. The outlook for 2013 remains positive with demand in many faster growing global markets offsetting the continued weakness in European economies.

"These remain extremely challenging times and it is essential industry and government continue to work together to secure long-term industrial growth."

And while the consequences of job losses on the high street do not appear to matter as much to government - HMV being the latest large casualty - financial analysts have put it simply: a shop can be replaced and grown into something of a success quickly, but replacing and growing the reputation and skills of high-tech British industries takes time.

The impact of a fractured automotive company suffering from poor exports and sales can result in job losses that are hard to replace and analysts say this is one of the many reasons why the government puts a lot of time and effort into protecting major - even the more obscure - companies and promoting investment in the British automotive industry.

A cheerful Mr Cable concluded: "The UK is achieving success by making products that are in demand across the world. We have a diverse and innovative automotive sector with some of the most productive plants in the world and a flexible, skilled and committed workforce.

"The government is creating a highly supportive business environment to ensure that UK manufacturers continue to flourish as well as encouraging further investment in the UK automotive sector, including the supply chain.

"There is no room for complacency and to build on this competitive advantage we are working jointly with the auto sector on a long term industrial strategy."