Car production accelerates

UK car production rose 1.3% last month, suggesting the industry is well on the road to recovery.

by Elizabeth Anderson
Last Updated: 06 Nov 2012

It’s been a miserable couple of weeks for economic data, but at least one industry is, er, motoring along quite nicely. According to the Society of Motor Manufacturers and Traders, UK car production in the rose by 1.3% in July, compared to the same time a year ago, with a total of 98,094 cars rolling off production lines. Which naturally suggests that car production in the UK might be on the road to recovery. Ladies and gentlemen, start your engines…

The SMMT said that the boost to July’s production will push up figures for the year as a whole: in the first seven months of 2011, production rose by 3.7% to 760,946, as the appetite for cars made on British turf in export markets such as China, continued to accelerate. In fact, SMMT chief exec Paul Everitt said emerging markets like China are one of the UK’s strongest customers. ‘We expect vehicle and engine production to continue to rise fuelled by demand in the fast-growing Bric economies, as well as mainland Europe and the US,’ he said.

It’s not all good news, though: commercial vehicle output (vehicles used in the transportation of goods or passengers) was down 5.9% in July to 9,127, and has dipped 5.1% overall this year so far. Engine production also fell, by 0.7% to 183,513 from July 2010. On the other hand, this seems to have bucked the trend for engine production this year so far, which is currently up 4% at more than 1.5m. So not a total disaster.

Obviously, this is all very encouraging to car manufacturers, who saw production fall 30.9% in 2009 from the previous year, while the number of commercial vehicles made fell more than 55%. It wasn’t until 2010 that the trend began to reverse, with figures rising by 27% - but even that didn’t match pre-recession figures of 1.75m vehicles made in 2007.

So there is a sense that it’s going to be a long, slow process to get back to where we were before the recession. But the home-grown car industry is important, particularly at a time when growth is weak and when the manufacturing sector as a whole looks increasingly unstable. Earlier this month, figures showed the sector contracted in July for the first time in two years, carrying warnings that alarm bells are ringing for UK manufacturing. So the news that car production is purring along nicely is at least something to be optimistic about.

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