Rise set to continue with investments continuing to take place by Nissan, BMW, Jaguar Land Rover (JLR), Volkswagen (VW) Group and General Motors (GM).

Vehicle manufacturing in the UK improved in July, driven by an improvement in passenger car output during the month. According to the latest data published by the Society of Motor Manufacturers and Traders (SMMT), passenger car output increased by 7.0% year-on-year (y/y) to 128,873 units. This has helped return the year-to-date (YTD) figures for this category further into positive territory, with an increase of 1.9% y/y to 893,263 units. However, the trade association also reported that commercial vehicle output fell by 11.8% y/y to 7,942 units as output in the YTD has now fallen by 13.3% y/y to 56,459 units.


Significance: Although export sales make up a considerable amount of passenger car output, the weakness in Europe – one of its most important trading partners – combined with the improvement in the UK market over the past year or so, has meant that its importance has ebbed. For the YTD that has fallen from 82.7% in 2012 to 78.5%, with a tally of 77.6% exported in the past month alone. This is also despite a relatively high recent base comparison, thanks to demand for premium and niche models built in the country. This is set to continue with investments continuing to take place by Nissan, BMW, Jaguar Land Rover (JLR), Volkswagen (VW) Group and General Motors (GM). There are also hopes that this will help attract component suppliers back to the country, helped by the support from the government-backed Automotive Investment Organisation. IHS Automotive anticipates that 2013 passenger car production in the country will decline almost 2% to 1.45 million compared to 2012, although growth will return in 2014, and more substantial gains are anticipated during the second half of the decade. Commercial vehicle output will be significantly hampered by the withdrawal of Ford though, which ended production during July.

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