UK car manufacturing hit 1,025,474 items in 2023, in accordance with the newest figures revealed at the moment by the Society of Motor Producers and Merchants (SMMT). With 905,117 vehicles and 120,357 industrial autos (CVs) produced, output was up 17.0% on the earlier yr. The easing of pandemic-related challenges, from chip shortages to lockdowns, and rising electrified mannequin manufacturing, mixed to drive annual output above a million for the primary time since 2019.¹

Robust December performances for each automobile manufacturing, up 20.7% yr on yr, and CV volumes, up 80.3%, rounded off a constructive yr, which noticed a revival of the business’s fortunes. Eight all-new cutting-edge fashions entered manufacturing in 2023, together with on the newly reopened Ellesmere Port EV solely plant,² whereas some £23.7 billion of personal and public funding commitments had been made – greater than within the earlier seven years mixed – from Cowley to Sunderland; gigafactories to R&D services.³

These commitments will drive inexperienced financial development, create jobs nationwide and transition the sector to electrified car manufacturing, which has already hit document ranges in 2023. UK manufacturing of battery electrical (BEV), plug-in hybrid (PHEV) and hybrid (HEV) autos surged to 346,451 items, up 48.0% on the yr earlier than to account for nearly two fifths (38.3%) of general output.

Total, UK automobile manufacturing rose 16.8% in 2023, its finest development charge since 2010, with the whole retail worth of all fashions made coming in at greater than £50 billion.⁴ Whereas 191,247 vehicles had been constructed for home consumers, the lion’s share of output was shipped abroad, proof of the contribution automotive exports make to the UK financial system. Yr on yr, exports rose 17.6% in contrast with a 13.7% rise in output for the British market.

The EU remained by far the sector’s largest international market, taking 60.3% of exports, with shipments up virtually 1 / 4 (23.2%) to 430,411 items. The US was the subsequent greatest vacation spot with a ten.3% share of exports (73,571 items), adopted by China with 7.2% (51,202 items), regardless of shipments to each slipping by -9.1% and -2.7% respectively. Turkey, conversely, noticed exports surge 223.8% to 27,346 items, making it the UK’s fourth greatest international market forward of Japan, Australia, South Korea, Canada, UAE and Switzerland.

Mike Hawes, SMMT Chief Govt, mentioned,

Receding provide chain challenges, new mannequin introductions and an enormous £23.7 billion of funding put UK car manufacturing firmly again on monitor in 2023. Trade will now deal with the supply of those commitments, transitioning the sector at tempo to electrical and scaling up the provision chain. With international competitors as fierce because it has ever been and amid escalating geopolitical tensions, each authorities and business should stay singularly targeted on competitiveness, with all the roles and development this may carry. We’re in a a lot better place than a yr in the past, however the challenges are unrelenting.

Regardless of difficult market circumstances, British specialist, luxurious and efficiency automobile makers had one other bumper yr, with mixed volumes climbing 6.3% to 34,613 items, price an estimated £7.1 billion.4 Two high-performance all new electrical fashions entered manufacturing, in Goodwood and Hethel, proof of how electrification is being embraced by producers proper throughout the sector.

The sector additionally acquired a lift on the very finish of 2023 with the deferral of more durable guidelines of origin for batteries and EVs traded between the UK and EU. The transfer will assist safeguard the competitiveness of the sector within the UK and Europe, offering invaluable time for native battery and related element manufacturing to ramp up.

2024 is a pivotal yr to make this occur however headwinds stay, most instantly with assaults on delivery within the Purple Sea elevating the spectre of delays and price pressures. Nonetheless, with the approaching menace of UK-EU guidelines of origin tariffs overcome, the newest impartial outlook foresees UK automobile and lightweight van output rising by round 3% in 2024 to 1.04 million items with the potential to exceed 1.2 million items by the tip of this decade.

To attain this, the UK should guarantee it stays aggressive, and so the forthcoming Price range is a chance for presidency to introduce measures that may enhance the sector. These ought to embody extending Local weather Change Agreements so electrical car battery-manufacturing and its related provide chain are eligible for aid; making inexperienced vitality extensively accessible and reasonably priced; delivering on commitments to enhance grid connections; and taking motion to shut vital labour and expertise gaps.

Fast supply of the federal government’s Superior Manufacturing Plan, full implementation of the Harrington Overview suggestions, plus a commerce coverage that locations automotive on the coronary heart of all future negotiations would additionally assist the UK consolidate its restoration and change into a worldwide chief in more and more electrified car manufacturing.

1: 1,303,135 vehicles and 78,270 CVs made in 2019
2: Fashions from manufacturers: Aston Martin, Lotus, Rolls-Royce, Stellantis, Daf and Alexander Dennis
3: SMMT calculations based mostly on publicly introduced funding commitments, private and non-private, in UK automotive manufacturing and R&D 2023 from manufacturers together with however not restricted to: MINI, JLR, Tata and Nissan. Whole introduced funding 2016-2022 inclusive: £16.2 billion.
4: SMMT calculations based mostly on RRP and publically accessible data – £51.6 billion.

SOURCE: SMMT