Wednesday, 14 June 2017

UK's Net Car Production: 2013/14

Nissan Sunderland, UK. 500,000 cars per annum. Outstanding

Most nations do not make cars and are totally a net importer of cars. Some do make cars yet import more than they make, so can be classified as a net importer. Still others manufacture more than they buy and therefore are a net exporter of cars.

The UK is in the middle and a net importer. This is explained below. At the bottom of the chart, under 'Total' is how many are produced, sold and the difference. In 2013 1,510,000 cars were made and 2,264,000 were sold in the country. That meant 754,000 more cars were sold in the UK than were made. Locally produced cars were 33.3% less than sales. In 2014, the figure blew out to -38.4%. Why so?




Land Rover3405528537356317









Net Importer



Data source: SMMT.

Looking at the brands that make cars in the UK reveals why. Nissan production was the same in each year but sales increased. A tooling problem at its factory late 2014 may have been largely to blame but it meant a 22,000 unit swing. Most other car makers had slight drops, with MINI about even. Only Land Rover had a sizable gain of 32,000 units. 

For the UK ever to get to being a net exporter, there would have to be increases in existing plants and even a new car maker opening a factory. As for the second scenario, Europe isn't growing and any new plants that are being set up are going to low wage countries in the east of the continent. The likelihood of existing expansion is slim. JLR is now building plants elsewhere so volumes will plateau there. MINI has capacity constraints where it is and Nissan is now putting any new models into plants elsewhere in Europe to better utilise those facilities. Toyota sales in Europe seem to have hit a ceiling so no increased production and Honda is repositioning its facility to hold what it does now. 

Seeing as many car makers sell plenty of cars in the UK and are not disadvantaged in importing them, they will not change. UK car makers are about at maximum production levels for their needs so the best that can happen is maintenance of the status quo or about minus 30-40% net importer. 

This analysis is for cars as units, not in value. Done on a value of the vehicles, it would presumably swing in the UK's favour but not enough to even close to being a net exporter. All that is achieved with foreign ownership and investment. There wouldn't even be an industry had it been left to domestic management and investment. Amazing.
The last year of UK Defender production. I hope they 
will still make them somewhere

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