UK automotive defies double-dip in 2012

As 2012 comes to a close, the UK automotive sector can look back and be proud of its achievements through the year. While the economy endured a double-dip, automotive flew the flag for the UK, becoming Europe’s second largest new car market and producing almost 10% more vehicles than it did last year.

Every single day, more than 4,000 new cars roll off UK assembly lines so, if the 80,000-strong Olympic Stadium crowd wanted to drive home in their own GB-built model, it would take just 19 production days. Domestic new car sales are even stronger with more than 5,500 new cars finding homes every day.

The UK automotive sector has an annual turnover of around £55bn with more than 40 global companies basing their operations here, delivering investment, boosting skills and employing more than 700,000 people. This sizable workforce is world-renowned for its flexibility, engineering expertise and the quality of vehicles it produces.

“The UK has out-performed our European partners during 2012 with vehicle manufacturing and new car registrations rising strongly through the year,” said Paul Everitt, SMMT Chief Executive. “While most EU markets have been impacted by eurozone instability, the UK has benefited from £6 billion of new investment from global vehicle manufacturers during the past two years, with car production set to break all-time records in the years ahead. At the same time new car buyers have responded positively to the exciting and fuel-efficient new models now on the market helping to boost registrations and make the UK the second largest market in Europe.”

Looking in detail at the UK new car market, it’s clear that fuel efficiency and new types of vehicle have attracted buyers into dealerships. The average emissions of a new car have fallen to 133.2g/km down more than 3.5% in just a year. The Mini and Supermini segments have shown the greatest growth in recent years (increasing market share by 6.6% in the last five years), and those in the Dual Purpose segment have been particularly strong (increasing share by 2.4% since 2007).

A noticeable trend across every vehicle category has been the rise of fuel-efficient models – so regardless of the size or type of vehicle motorists are buying, it’s those that boast the greatest efficiency that typically perform the best.

Looking to 2013, digital radio is set to be high on the shopping list for motorists. For the year so far, 24.3% of new cars have had the new technology as standard. Comparing this with the same period just two years ago shows rapid growth, with just 4.2% of new cars fitted with a digital radio in 2010. Vehicle manufacturers have committed to have all UK new car radios digitally enabled by the end of 2013, so the growth next year is expected to pick-up sharply as we progress through the year.

All new models and technologies always cause a stir and 2013 is set to satisfy early adopter motorists as more models join the electric car market and the number of hybrid cars continues to grow. New safety features will appear on more option lists and vehicle manufacturers will push the boundaries of technology and engineering to bring motorists even greater comfort and convenience.

For a full list of UK automotive investment announcements go to: www.smmt.co.uk/investment

UK automotive industry statistics

Registrations

  • This year, the UK has grown to be the second largest new car market in Europe.
  • In 2012, the UK new car market has grown in every month since March.
  • The growth is likely to be market specific, boosted by attractive offers and new, innovative models offering significant fuel efficiency and cost savings.

Latest market information

UK new car registration figures (Year-to-Date):

YTD Total Diesel Petrol AFV Private Fleet Business
2012 1,921,052 975,332 919,527 26,193 878,460 958,517 84,075
2011 1,822,065 921,024 877,440 23,601 777,794 951,965 92,306
% change 5.4% 5.9% 4.8% 11.0% 12.9% 0.7% -8.9%
Mkt share ’12 50.8% 47.9% 1.4% 45.7% 49.9% 4.4%
Mkt share ’11 50.5% 48.2% 1.3% 42.7% 52.2% 5.1%

SMMT registration forecasts: 2013 and 2014

2013
New car registrations: 2.015 million units, up 0.1% on the 2012 forecast. Diesel penetration: 50.2%.

New LCV registrations: 250,900 units, up 3.2% on the 2012 forecast.

2014
New car registrations: 2.062 million units, up 2.3% on the 2013 forecast. Diesel penetration: 50.5%.

New LCV registrations: 262,300 units, up 4.5% on the 2013 forecast.

Manufacturing

The UK is home to:

  • Seven volume car manufacturers.
  • Eight commercial vehicle manufacturers.
  • 11 bus and coach manufacturers.
  • More than 10 major premium and sports vehicle manufacturers.
  • The greatest concentration of specialist niche brands anywhere in the world.
  • Eight Formula One teams.
  • Over one million vehicles and two million engines are produced in the UK each year.
  • UK car manufacturing is set to break all time records by 2015 producing more than two million cars (surpassing the previous high 1.92m of 1972).
  • More than 80% of vehicles and 60% of engines manufactured in the UK are exported.

Economy

  • Last year, the UK automotive sector had a turnover of £55 billion.
  • Net value-added to the economy for 2011 was £12 billion.
  • UK automotive accounts for around 10% of total UK exports.
  • In the last two years, international automotive companies have invested more than £6bn in the UK – expanding facilities, introducing new models and employing thousands more people.
  • The industry employs more than 700,000 people with 140,000 people directly employed in manufacturing.
  • UK automotive represents around 3% of the UK’s total GDP.
  • The UK industry invests around £1.3bn each year in automotive R&D.

Supply chain

  • At present, about 80% of all component types required for vehicle assembly operations can be sourced from UK suppliers.
  • This year, the Automotive Council identified more than £3bn worth of opportunities for domestic suppliers, naming key components that vehicle manufacturers are looking to source in the UK.
  • The UK automotive supply chain typically generates £4.8bn of added value annually to the UK economy.
  • There are around 2,350 UK companies that regard themselves as ‘automotive’ suppliers, employing 82,000 people.
  • It is estimated that every job in UK vehicle assembly supports 7.5 elsewhere in the economy.
  • Of all UK suppliers, more than 70% manufacture their products in the UK.

Business environment

  • There is an industry-wide desire to source more components locally, particularly components relevant to the low carbon and electric vehicle market.
  • The UK is internationally recognised for its ability to use workforce flexibility to manage efficiently fluctuation in production levels.
  • The Automotive Council is a collaborative industry and government body that is working strategically to shape the future of UK automotive.

Environmental credentials

  • In the last 10 years, emissions of new cars registered in the UK have fallen 23% to 133.2g/km CO2.
  • Emissions from the entire UK car parc have fallen 10.2% since 2000. The total number of vehicles on the road in 2011 emitting less than 100g/km CO2 was 123,296.
  • The Automotive Council has identified five technology groups where the UK has the potential for a significant return on investment.

New car registrations

Find monthly new car registration data and in-depth analysis here.

New car registrations