Business

UK car output reaches 17-year high on export growth

Lines of new cars and trucks Image copyright PA

The number of cars made in the UK reached a 17-year high last year, according to the industry's trade body.

About 1.7 million cars rolled off production lines in 2016, a rise of 8.5% on the year before.

The Society of Motor Manufacturers and Traders (SMMT) added that exports rose 10.3% to 1.35 million vehicles, a record for the second consecutive year.

But SMMT head Mike Hawes repeated fears that investment would suffer without a suitable post-Brexit EU trade deal.

Mr Hawes said that car production was on course to reach an all-time high before 2020. But the SMMT's statement sounded a note of caution after revealing that investment by the industry fell to £1.66bn last year, compared with about £2.5bn in recent years.

On Tuesday, Mr Hawes told MPs on the Treasury Committee that many carmakers are putting off investment until there is more clarity over the UK's trade relations with the EU.

'Red line'

Mr Hawes said: "Significant investment in new plants and products over the past few years has driven this growth, not a post-Brexit bounce.

"We want trade deals but they must be the right deals, not rushed deals. Failure to do so could damage UK automotive manufacturing beyond repair."

The imposition of tariffs would be "a red line for the industry," he said. "There would be an impact on demand and jobs - that's a cliff edge we want to avoid."

However, Business Secretary Greg Clark insisted the car industry would thrive, saying: "Our modern industrial strategy will make the UK one of the most competitive places in the world to grow a business and these figures show why the UK automotive sector has such a vital role to play as we build on our strengths and extend excellence into the future."

US growth

UK car exports to EU countries increased by 7.5% to 758,680 last year, accounting for half of all exports, the SMMT said.

There was also a big rise in car exports to the US, where demand jumped by almost half, accounting for around 14% of all UK car exports.

Increases were also seen in Turkey, Japan and Canada, with a modest 3% rise in China, the SMMT reported.

The UK has 15 car plants, directly employing 169,000 workers and 814,000 across the sector.

Jaguar Land Rover increased production by 11% last year to 544,000, Nissan's rose by 6.5% to 507,000, the Mini by 4.9% to 210,000, and Honda by 12% to 134,000. Production of Toyota models fell by 5% to 180,000.

The top 10 British best-sellers worldwide last year were the Nissan Qashqai, Toyota Auris, Mini, Vauxhall Astra, Range Rover Sport and Evoque, Land Rover Discovery Sport, Honda Civic, Jaguar F-Pace and Jaguar XE.

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