Britain could overtake France to become second-largest car maker in Europe

UK plants run by the likes of Jaguar Land Rover (JLR), BMW and Nissan are operating at close to full capacity amid increasing demand from countries such as China, reports The Telegraph.

Tim Abbott, managing director of BMW’s UK operations, believes that Britain will produce more cars than their French rivals by 2018 if this trend continues.

“All the indications appear to be saying Britain will be second in a few years,” he said yesterday on the sidelines of the SMMT automotive conference in London.

“It will be about the demand for the cars made in the UK but that looks to be there judging by the recent performance of the likes of JLR, Nissan and BMW.”

Last year, 1.5m cars were made in Britain, according to the European Automobile Manufacturers’ Association, with expectations this could hit 2m by 2018.

“You could see it happening [UK overtaking France] if UK plants are at full capacity, which they are not far off being,” said Andy Palmer, Nissan’s executive vice-president.

As industry leader Germany churned out 5.5m vehicles last year, France managed just 1.9m, largely due to slowing sales at its major car makers, PSA Peugeot Citroen and Renault. Demand for new cars in Europe as a whole slumped to a 17-year low in 2012 as the continent grapples with recession.

In contrast, domestic demand for British cars grew 20.9pc in May, beating pre-recession levels, while sales have jumped 9.3pc in the year-to-date to 948,666 units.

But it is demand from emerging markets that has helped the industry record 15 consecutive months of growth. China is now JLR’s biggest market, prompting the company to build a factory there to make 130,000 cars a year. For BMW, one in five cars sold in the world is now bought by a Chinese customer. At Rolls-Royce it is one in four.

“With government support and vehicle manufacturers investing billions in UK plants, the prospects are very good,” the SMMT said.