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United Kingdom Autos Report Q2 2008Published by: Business Monitor International Published: May. 1, 2008 - 42 Pages Table of Contents
AbstractThe UK’s automotive industry is abuzz with activity, demonstrating the ongoing attractiveness of doingbusiness there. As BMI illustrates in the latest UK Automotives Report, industry majors have earmarkedsignificant investment for the sector, which augurs well for long-term growth. Moreover, the UK hasreported positive gains in terms of output, despite facing a threat from manufacturing bases in EasternEurope.Vehicle production and exports in the UK reached record levels in 2007 and all indications are that thecountry is on its way to re-establishing itself once again as a leading manufacturing hub. According todata from the UK’s Society of Motor Manufacturers and Traders (SMMT), total output reached 1,750,259units in 2007, up by 6.1% on the previous year. Total exports climbed by 6% year-on-year (y-o-y) to1,317,027 units. The positive results show that producing vehicles in the UK can still be profitable forcarmakers vis-à-vis Eastern European countries. BMI expects vehicle production to reach 2mn units in 2008. However, although key players such asNissan have expressed a long-term commitment to manufacturing in the UK, rising material and fuelcosts on top of unfavourable exchange rates could still erode the competitiveness of UK output, especiallyagainst Central and Eastern Europe, which offer manufacturers relatively cheaper manufacturing costsand facilitate access to burgeoning markets. Fresh investment this quarter comes from Honda and Toyota. Honda has earmarked investment ofGBP80mn in order to upgrade its plant in Swindon. Around GBP20mn will be spent on plasticoperations, GBP16mn on casting and GBP50mn on welding and painting production technology. Asignificant number of new jobs are expected to be created as a direct result of the investment.Toyota, for its part, has announced investment of EUR115mn (GBP88mn) for the UK. The capital will beused by the manufacturer to produce a new 4-cylinder, 1.3-litre petrol engine at its plant in Deeside, northWales. The importance of this development for the UK’s automotive industry was summed up byTokuichi Uranishi, Executive Vice-President of Toyota Motor Corporation, who said, ‘Thisannouncement recognises the quality of the UK workforce and demonstrates Toyota’s confidence in ourUK investment and continued efforts towards local production’. With respect to car sales, results so far this year demonstrate the resilience of the country’s new carmarket against a challenging economic backdrop. Growth in the new car market was better than expectedin March 2008, with sales edging up by 0.5% y-o-y to 451,642 units. Sales for the first three months ofthe year dipped, however, by 0.7% to 683,349 units. In BMI’s view, a fall in consumer confidence on theback of tighter lending controls may hold down new car sales this year. Our forecast for sales in 2008currently stands at 2.33mn units. Get Full Details About This Report >> |
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