SMMT Chief Executive Mike Hawes announces UK’s automotive industry’s manufacturing and global exports performance for 2018 (Photo by Tianxing Bai)

According to figures released by the Society of Motor Manufacturers and Traders (SMMT), exports continued to drive British car manufacturing in 2018, with 81.5 percent of all UK-made cars shipped overseas, the highest proportion since 2012. 1.2 million cars were built for export last year, the third highest figure on record.

In total, 1.5 million cars rolled off British production lines, representing a 9.1 percent decline from 2017. Production for export declined by a more moderate 7.3 percent, as slowdowns in the Chinese and European markets took effect, with shipments down 24.5 percent and 9.6 percent respectively. EU demand fell less than it did at home, however, with UK registrations of British-built cars down 20.9 percent year-on-year. Both markets were affected by the introduction of the new WLTP emissions testing regime, which constrained the supply of specific models in the second half of 2018.

Demand for British-made cars grew substantially in many international markets, as the production of key models only built in the UK ramped up. Exports increased to Japan by 26 percent, South Korea by 23.5 percent, Russia by 10.3 percent and the US by 5.3 percent. Elsewhere, Germany, Italy, France, Belgium and Spain remained in UK Automotive’s top 10 export nations, despite the decline in European demand.

The EU remains Britain’s largest trading partner, taking a 52.6 percent share of all UK car exports in 2018, equivalent to 650,628 units. At the same time, 68.4 percent of all new cars registered on UK roads were imported from European factories. Every day, more than 1,100 trucks cross into the UK from the continent to deliver components to UK vehicle and engine plants worth £35 million – emphasising the importance of free and frictionless trade between Britain and Europe.

Critical as this is, uninterrupted bilateral trade between the UK and other key global destinations must also continue. Some 15.7 percent of all UK car exports go to worldwide destinations, with which the UK enjoys mutually preferential trading arrangements as part of the EU. It is vital that these agreements don’t lapse when the UK leaves the EU, or else consumers in these markets will face less choice alongside higher prices.

Car production for domestic buyers fell 16.3 percent last year, to 281,832 units, as the market was hit by ongoing uncertainty over diesel policies, changes to emissions regulations and declining business and consumer confidence. Investment into the sector was also down, by almost half compared with 2017, to just £588.6 million, partly due to the cyclical nature of product development but also as a result of businesses waiting for certainty in regards to the future UK-EU relationship. Despite the decline, the UK remains the second largest new car market in Europe after Germany and the continent’s fourth-largest vehicle producer.

Mike Hawes, SMMT Chief Executive, said, “The UK has a global reputation for automotive engineering, thanks to a rich history, highly skilled workforce and a diverse array of desirable brands. The industry trades globally, benefiting from strong government support for the sector, a competitive business environment and free and fair trading arrangements with the EU and other global markets.

“Despite challenges as the UK leaves the EU, the fundamental strengths of British automotive manufacturing have not changed, but it’s imperative we have economic and political stability to safeguard future growth and our mutually beneficial trading relationships. Anything less risks limiting consumer choice and holding back future progress.”

UK Automotive is one of Britain’s biggest exporters of goods, and one of the country’s economic pillars, employing 186,000 people directly in manufacturing and delivering an annual £20.2 billion directly to the Treasury. Britain has some of the highest productivity levels in Europe, and a is a key global location for the development, testing and deployment of future mobility technologies and services, thanks to a strong partnership between government and industry, supportive regulation, and close collaboration with adjacent sectors such as tech, telecoms, and academia. (Tianxing Bai)