The number of cars built in the UK rose again last month, but production levels remain almost a third lower than pre-Covid.
According to the latest Society of Motor Manufacturers and Traders (SMMT) figures, British factories made 79,046 new cars in May 2023, which is 16,762 more than in May last year. Growth was reported in production for the home market and overseas sales – exports rose almost 30 per cent to 62,858 vehicles, while the number of cars headed to UK showrooms rose by 45 per cent to 16,188.
This means those export markets accounted for almost 80 per cent of UK car production, with EU countries the most important markets for British factories, representing 56 per cent of total overseas sales. The US, China, Japan and Australia are our next biggest export markets, but the total volume exported to all of them is around half the number going to the EU.
The figures “reinforce the need for continued tariff-free trade between the UK and EU especially in electrified vehicles which will be hit by tougher rules of origin, due to come into force from 1 January 2024, unless the EU and UK can both agree to their postponement,” the SMMT said.
According to Mike Hawes, chief exec of the SMMT, the latest figures are good news and show the foundations of the industry are strong. However, he reiterated the organisation’s calls for government help to keep the UK car business competitive in challenging global markets. “With weak GDP growth, high inflation and rising interest rates, it’s crucial that UK car factories stay globally competitive. All political parties must recognise the strategic importance of this sector and back our call for an industrial strategy that supports local production, assures export market access and attracts further investment to safeguard our future,” he said.
This week also saw the launch of the SMMT’s ‘Manifesto 2030’ which highlighted the challenges facing the car industry, and set out a pathway to creating the environment for the UK to make three-quarters of a million EVs annually – a £106bn potential boost for UK business.
There’s some good news for consumers in the production figures too, as increasing production improves showroom availability.
“An influx of new cars will support much needed stock moving into the used market, enabling more availability and choice for consumers looking to purchase second-hand cars,” said Lisa Watson, sales director at Close Brothers Motor Finance.
“Manufacturers will, however, be hoping that stagnant inflation and continued economic pressures don’t hamper consumer demand and have an adverse effect on production.”
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