- UK vehicle production surpasses 1M
- Increased output due to investment
- Challenges remain amidst growth
Official data published on Thursday indicates that vehicle production in 2023 surpassed one million units for the first time since 2019. As a result, British automakers have declared themselves “back on track.”
According to the Society of Motor Manufacturers and Traders, the United Kingdom’s factories produced 1,025,474 vehicles (907,115 cars and 120,357 vans), an increase of 17% compared to 2022 outputs.
This is the most significant annual growth in thirteen years.
The lessening of pandemic-related issues, such as lockdowns and chip shortages, and increased production of electrified models contributed to busier assembly lines and a rise in output in the previous year, according to the SMMT, which further stated that the industry’s fortunes have been “revived.”
The production of plug-in hybrids, conventional hybrid vehicles, and electric vehicles (EVs) increased by 48% year-over-year to 346,451 units, representing nearly two-fifths of total output from UK factories.
With 60 per cent of exports to the EU, the sector maintained its position as the most significant global market. The United States was the second largest destination, with China following suit.
Due to increased exports, Turkey is now the fourth-largest global market for the United Kingdom.
Nissan once again produced the most passenger cars in the United Kingdom, with its Sunderland plant maintaining its long-standing position.
UK Car Manufacturing Highlights 2023
The Qashqai SUV, the second best-selling new model in Britain, was the Japanese company’s most-produced model. Juke and Leaf EV production enabled the North East car facility to manufacture 324,893 units in 2023, an increase of 36.3% year-over-year.
It affirmed last year that the next generation’s Leaf, Juke, and Qashqai will be manufactured in the United Kingdom, subsequent to a £2 billion investment and the declaration of a third battery gigafactory in the North East.
JLR ranked as the second largest manufacturer in terms of vehicle volumes, producing a combined total of 238,422 automobiles from its facilities in Castle Bromwich, Halewood, and Solihull.
According to the data, the production of the British brand owned by Tata increased by 17.6% compared to 2022.
Although the Mini Hatch was the second most produced model in 2023, the BMW-owned brand’s production at Plant Oxford decreased by 0.7% to 184,996 units, making it the third largest automaker.
This is partly due to the transition to new models arriving in 2024 and the planned relocation of the next-generation electric Mini production to China.
UK vehicle production is back on track in 2023 due to resolving supply chain issues, the introduction of new models, and a massive £23.7 billion investment,” said Mike Hawes, chief executive officer of the SMMT.
“The industry will now concentrate on fulfilling these obligations, accelerating the sector’s transition to electric power and expanding the supply chain.”
Given the current state of geopolitical tensions and the intensifying global competition, it is imperative that both the government and industry maintain an unwavering commitment to competitiveness, which will generate employment opportunities and foster economic expansion.
While we are significantly better off than a year ago, the obstacles remain formidable.
Challenges Amid Automotive Optimism
The SMMT further stated that the year was “bumper” for luxury, performance, and speciality automobile manufacturers.
Aston Martin, Bentley, and Rolls-Royce increased their combined production volumes by over 6 per cent to 34,613 units, valued at an estimated £7 billion.
In response to the SMMT figures, Richard Peberdy, UK Head of Automotive for KPMG, cautioned that the statistics obscure significant issues regarding the present condition of the automotive industry in the United Kingdom.
According to him, fleet demand has been the primary driver of increased outputs for the residential market, as consumer purchases have stayed the same annually.
In addition to driving up mortgage payments, increased interest rates have also increased the cost of auto financing. Additionally, insurance premiums have increased, among other rising household expenses.
“Undoubtedly, this financial environment is restraining and altering the automobile purchasing decisions of consumers, and this trend will continue until the strain on household finances eases.”
Four out of five UK automotive executives are concerned about the impact of this economic environment on their company in 2024,” he continued.
However, according to KPMG’s Global Automotive Executive Survey findings, almost all respondents (nearly nine out of ten) are optimistic about the sector’s capacity to generate greater profitability in the coming five years.
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UK’s EV Battery Challenge
According to a report published earlier this week by the Centre for Business Prosperity at Aston University, the United Kingdom’s reliance on imported batteries puts it at risk of falling behind in the EV arms race.
According to the study, the automotive sector of the United Kingdom is at a critical juncture where it must “adapt, innovate, and invest” to “capture the opportunities the electric vehicle market presents to the country.”
It concludes that immediate policy intervention and reduced reliance on imported batteries are essential.
The editor of Autocar Business, Mark Tisshaw, remarked that 2023’s production figures “represented a return to form for the UK manufacturing industry.” However, he urged the government to “substantially enhance support” for electric vehicle (EV) demand to maintain the sector’s trajectory.
“Billions of pounds in public and private investment commitments and the record output of electrified vehicles announced last year indicate that the United Kingdom has the potential to become a global leader in battery and EV technology; however, Westminster must recognise and capitalise on this potential.”
