UK Car Production at Highest Level in 17 Years

Around 1.72 million cars were produced in the UK in 2016, as production levels reached their highest point since 1999. In November alone nearly 170,000 vehicles were built in UK factories, an increase of 12.8% compared with the same month the year before. Annual exports also reached record levels for this millennium with 1.35 million vehicles shipped abroad last year.

Such an increase is positive news for the UK auto industry and demonstrates that it has found ways to succeed in otherwise uncertain times for many markets. We look at some of the reasons for these high production figures, those of other nations and what the future holds for UK car production.    

Reasons for the Rise in Production

The UK has become a globally competitive car manufacturer, as demonstrated by the large percentage of exports. Vehicles made in Britain hold a certain amount of appeal and are viewed as reliable by many drivers in other countries, which has led to an increased demand. Plus, domestic drivers trust and value vehicles made in Britain too.

These latest results are also the fruits of a boost to investments which have been made over the past few years. Investment in research and development reached £2.5 billion in 2015, up from £2.3 billion the year before. This has been used for research purposes but also to create and secure jobs, providing a production boost.    

European Production Levels

Not all countries have released their 2016 car production figures yet, but based on 2015 and previous figures, the UK is still behind a few of its European neighbours. In Germany 5.7 million cars were produced in 2015 and given that followed growth for three years running, 2016 results will be unlikely to have dropped much if at all.

For France, the PSA Group (Peugeot, Citroen and DS) are again the top car manufacturing group. While in Spain SEAT saw a 3% rise in sales for the year, helping to boost Spanish car manufacturing levels as well.

Future Production Predictions

Despite such positive results for the UK car industry which have been achieved thanks to previous increases in investment, there is a lot of uncertainty surrounding its future and whether it will be able to build on this. Investment in the UK automotive industry fell across 2016, which could lead to lower production levels in the coming few years.

This is believed to be partly influenced by Brexit, which is causing further disruptions. Many carmakers may be considering moving their production to other countries, especially as uncertainty still remains about the UK’s future in the EU and single market. Clearly this would lead to a drop in production and harm the UK auto industry unless investment was found elsewhere.

It has largely been positive news for the automotive and manufacturing industry though, as it looks to continue competing with its European neighbours.