Amongst decades of declining success of the British manufacturing industry, there have been a few leading lights which have kept the industry relevant around the world. One such sector has been car manufacturing. The likes of Jaguar, Land Rover, Nissan, Honda, Toyota and Mini have led the charge, but there’s an equal number of world class sports and luxury brands which produce in the UK.
Now, thanks to a survey from the Society of Motor Manufacturers and Traders (SMMT), we know that British Car Manufacturing output hit a 16 year high in the first half of 2016 as more than 900,000 new cars rolled off the production lines at UK factories. That amounts to a 13% leap over the same period in 2015 and was the best performance since 2000 – long before the financial crash.
The rise coincides with the launch of a number of new models of leading cars from the likes of Mini and Land Rover. However, 78% of the cars made in the UK were sold around the globe, with the EU being the largest market for those cars. That casts some doubt on the future of the British car industry, because if free trade can’t be secured, it would be in the better interests of those manufacturers to move their plants elsewhere.
Mike Hawes, the SMMT’s chief executive, said that the outlook for the UK car manufacturing industry, which is an area we supply hydraulic fittings, is uncertain now that we’ve voted to see a future outside of the EU. He said: “The latest increase in production output is the result of investment decisions made over a number of years, well before the referendum was even a prospect.
“These decisions were based on many factors but primarily on tariff-free access to the single market, economic stability and record levels of productivity from a highly skilled workforce. To ensure the sector’s continued growth, and with it the thousands of jobs it supports, these must be priorities in future negotiations.”
The months since the Brexit vote will have meant lower costs for the car manufacturing industry though, thanks to the collapse in the pound meaning that it’s cheaper for customers overseas to purchase cars from the UK. On the other hand, parts sourced from overseas for those cars leapt in price, which might mean reduced overall profits for the industry.
Another potential concern for manufacturers in the UK is that though we may gain access to the free market, we will no longer have a say in shaping the regulations they have to abide by. That, of course, is on top of the fear that the UK could lose highly skilled workers to the EU.
Clearly then, there’s a great deal of uncertainty surrounding the British car manufacturing industry. How that uncertainty is managed, however, is going to become crucial. The new PM and her team are working on a new industrial plan for Britain, we can only wait to see the revolutionary proposals it contains to keep the car manufacturing industry appeased.