UK car production continues to grow in first quarter of 2016

Car production in the UK remains on course to hit an all-time record by 2020, after official figures revealed 10.3% more cars were made in the first three months of 2016 compared to last year.

In total, 443,581 cars were produced until the end of March, equating to around one UK-built car being manufactured every 16 seconds. Home market demand for UK cars was up 8% and exports rose 11.1%.

The leading manufacturers were Jaguar Land Rover, Nissan, Honda and Toyota.

That rate of growth is expected to be maintained in 2016 and beyond, providing no major outside factors impact on growth, setting the UK car manufacturing industry on course to eclipse the 1.92 million vehicles made in 1972. Last year, 1,587,667 cars were built in the UK.

However, if UK manufacturing is to eclipse the 1972 figure, SMMT president Mike Hawes warned that the manufacturing sector and supply chain would have to attract up to 38,000 new employees – 27,000 of them in the supply network - to be able to meet demand.

Today, 160,000 people work in car manufacturing out of around 799,000 in the car industry, across 30 manufacturers building more than 70 models of car.

“Already the Automotive Council has identified a shortfall of 5000 gaps in the industry, and that gap is set to grow unless we can address the areas where we need the skills,” said Hawes.

“We need to attract talent to the industry and that is something the car makers, the government and we are focusing on.”

In particular, there is a renewed focus on apprenticeships, something the car industry has a long track record in providing successfully.

Hawes noted the progress being made with the Automotive Apprentice Matching Scheme, which aims to highlight opportunities in the supply chain for applicants who aren’t successful in getting on to major OEM schemes.

“Many people have the right skills, but the huge demand for places on manufacturer schemes mean other apprentice schemes get overlooked - this should help highlight the diversity of opportunities out there,” he said.

Hawes also highlighted ongoing investment into R&D by car manufacturers, which totalled £2.4 billion last year as a sign that growth would continue.

In particular, he noted the near £280 million of investment announced in new production facilities in Wales, led by Aston Martin, TVR and Toyota, with the likely creation of 1,000 new jobs. Today, 18,000 people work in the car industry in Wales, working for around 150 automotive component and system companies.

However Hawes cautioned that there was still uncertainty in markets around the world, with Europe and USA leading increased demand, but uncertainty still surrounding the once booming Chinese and Russian markets.

He also sounded a note of caution around the referendum on whether Britain should stay in Europe: “We have enjoyed a period of significant investment by global car companies in the UK in recent times, but anything that causes uncertainty is cause for concern in the medium to long-term,” he said. “Instability doesn’t encourage investment.”