Britain’s auto industry has posted its best manufacturing figures in a decade – but the stellar performance could be the final strong showing if the UK votes to leave the EU, reports The Telegraph.
A total of 1,587,677 cars rolled off British production lines last year, an increase of 3.9 per cent on the previous year and the highest in recent history, according to official data from industry body the Society of Motor Manufacturers and Traders (SMMT).
The figure was only a few thousand behind the total produced in 2005, before the financial crisis reshaped the automotive landscape, though this number is considerably lower than the all-time record set in 1972, when 1.92m cars ware manufactured.
However, the resurgence in Britain’s £69.5bn auto sector could crash into reverse if the coming referendum results in the country leaving the EU, according to a leading analysts.
“The EU is by far our biggest export market and leaving it would have a massive impact with the possible end of free trade agreements.
“No manufacturing industry would be more affected by a vote to leave than automotive. Production is rising in the UK but I cannot over-emphasise how incredibly difficult it is for the industry to make decisions with the current questions over the referendum.
“It makes investments of hundreds of millions of pounds on five, seven and 10-year timeframes in a way that no other industry does.”
Although Toyota has said in the event of Britain voting to leave the EU it will retain its plant near Derby, which makes Auris and Avensis cars, Mr Newton said other major manufacturers are reluctant to make major investments with the spectre of Brexit looming.
Data from SMMT backed up his warning, showing that 77.3 per cent of cars made in the UK were exported in 2015, making the sector the country’s largest goods exporter. In total 1.23m cars went overseas, up from 1.19m a year earlier.
Although this level was half a percentage point lower than in 2014, this is likely to reflect Britain’s strong market for cars, which earlier this month reported an all-time record of 2.63m new cars registered.
Global economic conditions were reflected in the final destinations for UK-built cars, with the economic slowdown in China resulting in an annual drop in exports of 37.5 per cent to 86,000 cars, and sales to Russia collapsed from almost 81,000 two years ago to just 25,000.
Mike Hawes, SMMT chief executive, said: “Despite export challenges in some key markets, foreign demand for British-built cars has been strong, reaching record export levels. Continued growth in an intensely competitive global marketplace is far from guaranteed, however, and depends heavily on global economic conditions and political stability.”
However, Mr Newton played down the decline in exports to China and Russia as “almost insignificant” in light of the total performance, adding that these markets represent a fairly small number of premium vehicles.
Despite, this Jaguar Land Rover is clearly hurting from the slowdown in China and efforts by the Beijing government to cut the premium foreign manufacturers can charge. The Coventry-based manufacturer which is the single largest producer of cars in the UK reported a quarterly pre-tax profit before exceptionals of £88m in November, compared with £600m the last time.
When the £245m charge JLR took for the 5,800 cars destroyed or damaged in the chemical blast in the Chinese port city of Tianjin in August, the company made a £157m loss over the period.
