The UK automotive industry continues to make significant gains in employment, economic contribution and environmental performance, says the Society of Motor Manufacturers and Traders.
The industry body’s 17th annual Sustainability Report reveals that the automotive manufacturing sector turned over a record £71.6 billion in 2015.
Jobs, production output and vehicle sales all grew while the environmental impact of manufacturing saw significant reductions. Waste from production was cut by almost a quarter, and water and energy use per vehicle produced were also reduced.
Access to the single market and EU-negotiated international trade deals, the ability to recruit talent internationally and influence new standards have all helped make the UK automotive industry one of the world’s most competitive. This has helped attract billions of pounds in investment in recent years, delivering record productivity, job creation and growth.
The record turnover by automotive manufacturers represents a 7.3% increase on 2014, with the additional value generated for the UK economy standing at some £18.9 billion – itself a 3.8% rise on the previous year. Investment in R&D by the industry also reached a record high of £2.5 billion in 2015, which now represents some 12% of the country’s total R&D spend.
The figures are further evidence of the UK’s status as a global automotive leader, as production and sales of UK-built vehicles continue to grow both at home and abroad.
The strong performance has been matched by growth in employment, with 814,000 people across the UK now dependent on the sector as a whole for a job – a substantial increase of 17,000 over the previous year. Those employed directly in manufacturing, meanwhile, grew from 161,000 to 169,000, with the average manufacturing worker generating more than £110,000 in value-added to the British economy.3
The sector’s strong social and economic performance has been achieved while simultaneously delivering substantial reductions in its environmental impact. 41% less waste was sent to landfill in 2015 than in the previous year, while the amount of water used to make each vehicle fell to a new low – down by 7.6%, driven largely by improvements in painting processes.
Meanwhile, the average new car registered in 2015 emitted 121.4g/km of CO2 – 2.6% less than in 2014.
There are mixed predictions for the future of UK car making after Britain leaves the EU.
The UK’s vote to leave the European Union may cost automakers about 2.8 million light-vehicle sales through 2018, researcher IHS Automotive said in its latest projections for industry.
Worldwide deliveries may rise to 89.82 million this year, about 200,000 fewer than anticipated before last week’s Brexit referendum, IHS Automotive said in an e-mail.
The researcher reduced estimates for 2017 and 2018 by about 1.25 million and 1.38 million, respectively.
“The UK is, unsurprisingly, anticipated to bear the brunt of the impact,” said Ian Fletcher, a London-based analyst for IHS Automotive. Instead of expanding 3.2 percent this year, the UK market may grow by just 1 percent, followed by declines each of the next two years, IHS Automotive estimates.
Meanwhile, despite advocating Remain, business minister Sajid Javid said on Tuesday that there will be midterm and long-term opportunities for the auto industry from Britain’s vote to leave.
“Because of last week’s decision of course there are some short-term challenges for businesses, but we must also remember there are medium-term and long-term opportunities for business as well, and that includes the auto industry,” Javid told parliament during a regular question session.
JLR says it is still pushing ahead with a new assembly plant in Slovakia, despite the EU exit vote.