Automotive supply chain investment falls

Motor industry investment in vehicle and supply chain manufacturing fell by 33.7 per cent last year, according to figures from the Society of Motor Manufacturers and Traders.

In its 2018 Sustainability Report, the SMMT highlight the fact that in 2017 the industry publicly announced £1.1 billion worth of investment earmarked for vehicle and supply chain manufacturing – down 33.7 per cent compared to 2016 (£1.6 billion).

Chief executive Mike Hawes highlighted the uncertainty facing the industry from Brexit, saying that the industry relies upon more than 1,100 trucks a day bringing components from the EU to car and engine  plants.

The automotive manufacturing sector turned over a record £82 billion in 2017 –  an eighth consecutive year of growth.

“The sector’s economic contribution now stands at £20.2 billion, although a recent SMMT study showed its impact on adjacent sectors as significantly larger, at around £202 billion – some 10 per cent of UK GDP.2 Jobs in the UK automotive manufacturing sector rose 2.8 per cent to 186,000, with employment across the wider industry reaching 856,000.

“At the same time, the industry improved its environmental impact, with waste to landfill falling to a new low of 0.7 per cent and impressive reductions in water and energy use.”

A 9.8 per cent fall in output for the domestic market drove the overall decline as the market responded to declining business and economic confidence, as well as concern over uncertainty about the UK government’s policy on diesel. Exports also fell, although at a much lower rate, by -1.1 per cent. Overseas demand continued to dominate production, accounting for 79.9 per cent of all UK car output – the highest proportion for five years.

The EU remained the UK’s biggest trading partner, taking more than half (53.9 per cent) of exports, while appetite for British-built cars rose in several key markets, notably Japan (+25.4 per cent), China (+19.7 per cent), Canada (+19.5 per cent) and the US, where demand increased by 7.0 per cent.