UK car manufacturing boom driven by overseas demand

Some 150,000 cars were built in November as production hits top gear.

by Rebecca Smith
Last Updated: 15 Jan 2016

Volkswagen might still be trying to weather the storm of the emissions scandal aftermath, with its plummeting share of European car sales the latest in a flurry of bad news. It’s not all doom and gloom for the motor industry though as UK car manufacturing is picking up the pace.

Production was up 9.3% in November with 150,084 cars built, compared to 137,347 for the same month in 2014, according to figures released by the Society of Motor Manufacturers and Traders (SMMT).

‘November’s manufacturing gains are encouraging, and put the car industry in a strong position with one month left in the year.’ He noted the pick-up in export production as particularly noteworthy, claiming it was ‘proof that despite challenges in some global markets, the UK continues to build cars that appeal to consumers across the world’.

Growth was fuelled by demand from overseas, with export production up 10.8% and year-to-date volumes 3.8% ahead of the same period in 2014. The manufacturing figures complement booming sales in November – the total number of new car registrations was up 3.8% year-on-year and 8% compared with October. This year could be a record one for sales if predictions pan out – KPMG’s head of automotive John Leech, said, ‘We expect that 2.62m cars will be sold in 2015, beating the 2.58m record set in 2003.’

It’ll be interesting to see how the role of both driverless and electric cars develops in the coming months. The European electric vehicle market grew 37% in 2014 and the UK, offering grants of up to £5,000 for electric and plug-in cars, as well as tax exemptions, saw the biggest increase of any major market. More recent stats from September showed the appeal of ‘alternatively-fuelled vehicles’ (including plug-in electric and hybrid cars) – their share of the market is still small at 2.7%, but sales were up 58.4% in the year to date.

There's obviously still demand for both petrol and diesel models, which were up 3.8% and 3.6% respectively for November, but the popularity of alernatively-fuelled vehicles remains on the up, with an 8.6% increase for the same period.

To keep demand on the increase, there’ll probably need to be further policy incentives to encourage take-up. But the VW scandal may well provide a nudge too – some consumers may be put off enough to pursue visibly ‘cleaner’ options.


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