According to recent figures released by the Society of Motor Manufacturers and Traders, SMMT, the number of automobiles manufactured in the UK for the first six months of 2016 hit the highest total since 2004 for a half year period. This spells good news for the UK auto manufacturing industry despite fears of a hard Brexit, should that be the case after talks and negotiations are complete. Other figures indicate that car production increased by more than 7.6 percent in July alone which brought the total number of cars produced in the 7 month period to more than 1 million. With 126,566 cars being produced in the seventh month, there is still optimism going forward even though Brexit details are yet to be finalized.
Whilst most people believe that concerns are in regards to the huge number of UK manufactured vehicles being exported to the continent, this is really only one level of concern. It is true that the EU imports a majority of UK built vehicles but the EU is also a source of highly skilled workers that fill a void in the number of qualified workers available in the UK. So, concerns are actually twofold. Initially, there is fear that the UK will lose a market for cars being produced in the UK if Brexit talks don’t end well and also that in losing workers who will no longer be eligible to work UK jobs upon exit from the EU. The fair trade agreement would be non-existent. That said, if countries like the United States offer good trade deals, this could be a bonus for both countries.
Amidst Fears, Sales in the UK Are Up for Domestic and Imports
According to SMMT, new car sales have indeed hit a half-year high and brands like Fiat’s Abarth Cars have broken records. Oddly, Fiat has announced that more Abarth Cars were sold in the UK so far this year even than they had in their homeland of Italy. In fact, the UK is Abarth’s biggest market of anywhere in the world, having sold well over 3,000 cars in 2016 which is a 54% increase year-on-year. Although Fiat’s Abarth Cars are not produced in the UK, the fact that the market in the UK is so ripe is quite promising. With sales booming across the board on UK as well as foreign made vehicles, it spells hope to UK auto manufacturing industry who also sell many cars in the United States, although admittedly the biggest market is the EU.
New British Manufactured Vehicles in High Demand Globally
One thing that has been a ray of hope is the fact that the EU is not the only market where British built cars are in high demand. According to the Chief Executive of Society of Motor Manufacturers and Traders, Mike Hawes, production so far this year is booming in large part due to British models that are in such high demand around the world. Apparently, there are other markets to tap and existing markets to ramp up sales in so all may not be lost. There may be a temporary slowdown which in the short term could spell despair but in the long term, the industry may be turned around again with better advertising and marketing in countries already selling large numbers of UK built cars.
Foreign Makes with a Strong UK Presence Also Concerned
Toyota has also expressed concerns over a hard Brexit as they, too, manufacture some of their models in the UK with some being marketed in the country and others overseas. In fact, more than 80% of all cars made in the UK had a final destination in an overseas market with the EU being the largest for UK auto manufacturing industry. Production was up for the entire year by 12.3%.
Fears may be as yet unfounded as Brexit negotiations have yet to be determined and won’t even start until after the general election. With greater numbers of Brits buying UK built cars, there is also hope that the UK will focus more on British cars in an effort to bolster the economy while talks and exit strategies are being devised. It is still too early to forecast how Brexit will impact the auto industry in the UK but if things continue as they have been so far this year, concerns may prove to be unfounded. Until then, countries like the United States, and other possible exit countries in the EU, will remain interested in what happens.