UK car exports drive industry’s revival

Increase in overseas sales follows £6bn wave of investment

Ranger Rover Evoque

Britain exported more cars last year than ever before, underlining the strides made by the automotive sector after being close to written off as a failed industry a decade ago.

The country’s eight main car plants – all of which are run by non-UK companies – produced 1.2m cars for sale overseas, up 7.8 per cent on 2011.

The increase was led by Jaguar Land Rover, owned by Tata of India. The company has been chalking big increases in exports on the back of large investments in key models such as the new Land Rover Evoque.

Total output of cars in the UK in 2012 reached 1.4m, up 9 per cent on the year earlier, with some 83 per cent of the vehicles being exported.

UK-based vehicle makers have announced £6bn of investments in recent years in an effort to boost the country’s total annual car output to about 2m units by 2016.

The healthy UK record contrasts with the problems experienced by the car industry in much of the eurozone. Car plants in France and Italy have been particularly hit by a sharp decline in new vehicle sales across the continent because of a collapse in consumer confidence.

The European Automobile Manufacturers’ Association said on Wednesday that the number of car registrations in the EU had fallen in 2012 by the largest year-on-year figure since 1993 to reach 12.1m units.

Vince Cable, the UK business secretary, said the figures from Britain amounted to a “great tribute” to Britain’s manufacturing strengths, “particularly in the face of challenging trading conditions in Europe and strong international competition”.

Mr Cable added that the creditable increase in exports and overall output was down to the UK-based industry’s strong record in investing in new models and production capabilities geared to producing cars “that are in demand across the world”.

However there are signs that a “two-speed” UK industry is emerging. Companies such as JLR are taking on new workers as a result of strong demand, especially from the US and China. But other car businesses in the country are likely to face much more of a struggle in 2013 as they are affected by the economic difficulties of the eurozone.

The UK arm of Japanese vehicle maker Honda last week said it was cutting 800 jobs at its plant in Swindon, Wiltshire, because of weak demand in continental Europe. While JLR’s plants in Halewood near Liverpool and in the Midlands manufacturing heartland are making vehicles for global customers, two-thirds of the Swindon unit’s production goes to the rest of Europe.

Last year Honda’s Swindon plant more than doubled its total output to reach 165,000 cars. But the size of this boost resulted from the artificially low production figure for the factory in 2011 as a result of component shortages from Japan caused by the country’s tsunami and earthquake disaster.

With JLR pushing up total production of cars from its three British plants by 25.4 per cent to 361,000, BMW increased output from its factory in Cowley near Oxford by 8.4 per cent to just over 200,000.

The German company has been investing heavily in the facility that makes its top-selling Mini small car, which has achieved large sales in North America and China.

Nissan’s factory in Sunderland – the largest car plant in Britain – increased the numbers of vehicles rolling off its lines by 6.3 per cent last year to 510,000, with its output split mainly between customers in the UK and the rest of Europe.

However, production at Toyota – another Japanese company with a large plant in Derby – fell 14.6 per cent to 109,000, partly because of economic weakness in continental Europe.

General Motors of the US – with a factory in Ellesmere Port on Merseyside – experienced a decrease in output of 34.6 per cent, bringing production from the unit to 190,000.

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