Car plant output in December pushes volumes to seven-year high but sentiment among wider manufacturing sector dips markedly.
Jaguar Land Rover has helped drive Britain’s carmakers to their best December output in a decade with the industry producing 109,000 vehicles – up by 27% on the same month a year earlier.
It capped the strongest year for car manufacturers since 2007, with more than 1.5m cars rolling off production lines over the 12 months, equivalent to a car every 20 seconds. The figure is 1.2% up on the previous year despite continuing weakness in some export markets. Further rises are forecast over the next 12 months.
Jaguar Land Rover, the Indian-owned but Midlands-based producer of the upmarket Defender and Range Rover models reported volumes rising by nearly 7.5% over the year while production at the Japanese-owned volume carmaker Honda fell by 12.3%.
The figures came as the latest industrial trends survey from the CBI revealed more gloomy sentiment among the general manufacturing sector.
Motor industry leaders said higher investment had triggered the strong result. The business secretary, Vince Cable, said it showed the government’s positive industrial strategy was paying off.
Mike Hawes, chief executive of the industry trade body, the Society of Motor Manufacturers and Traders (SMMT), said: “Placed in context, a 1.2% growth in UK car manufacturing in 2014 represents a very successful year. The industry has overcome various challenges, including slower than expected EU recovery and weakness in some global markets.
“More than £7bn of investment into UK production facilities has been announced in the past two years, and we are now seeing the effects as new models begin production – with more expected in 2015. UK car manufacturing is now more diverse than ever, with a unique combination of volume, premium and specialist brands giving our products truly global appeal.”
Hawes was keen to point out a doubling of car export values in the decade from 2005 to 2014 while Cable said that cars showed themselves to be a “driving force” behind Britain’s wider economic recovery.
“From Sunderland to Goodwood, Britain is turning out cars that are in demand all around the world. The UK’s automotive industry is thriving with a new car rolling off the production line every 20 seconds, while increasing levels of investment are helping to secure local jobs. Through the government’s industrial strategy we are backing the automotive industry as it goes from strength to strength.”
The figures were particularly welcome because of waning optimism from others, according to the latest quarterly CBI industrial trends survey. It showed expectations for export order volumes falling to show a balance of +1, down from +9 in the last survey in October. In January, total orders fell from +5 in December to +4. Output expectations dropped from +16 to +13, the lowest since October 2-13.
“Exports have grown modestly but there is a feeling that we will not see a repeat in the next quarter, with the eurozone still treading water and battling inflation,” said Rain Newton-Smith, director of economics at the CBI.
Britain’s car industry – now largely under the control of foreign companies – has become a major success story. Jaguar Land Rover is now producing 450,000 vehicles a year at three plants including Castle Bromwich and Solihull while Nissan of Japan builds half a million a year at its Sunderland plant. Nissan’s output of the Juke, LEAF and Qashqai models was down 0.3% on the year while the German-owned Mini factory in Oxford produced nearly 180,000 cars in 2014, up 2.3%.
The SMMT said almost four out of five new cars built in Britain in 2014 were exported, slightly down on the previous year, amid “challenges” in some export markets.
SOURCE: Terry Macalister, The Guardian, Friday 23 January 2015
