UK automotive industry achieves record turnover

<p>Britain’s auto industry turned over £69.5 billion last year.</p>

Last year, Britain's automotive industry turned over a record-breaking £69.5 billion, according to new data from the Society of Motor Manufacturers and Traders (SMMT).

The sector saw an increase of 6.6 per cent compared to 2013 and the turnover was also 65.1 per cent higher than in 2000. The SMMT says the numbers illustrate the health of the UK's car and commercial vehicle manufacturers, as well as the supply chains of businesses that feed them.

Jobs growth

Employment in the automotive industry is also growing, the trade association says. The vehicle manufacturers and parts producers currently support almost 800,000 jobs – a 3.5 per cent growth over the year.

However, this number is down 11.9 per cent compared to 2000, when 907,000 people were employed in the industry. This is because the manufacturing process has evolved over the years to become more efficient and less labour intensive.

Investment in manufacturing

Jaguar Land Rover, Ford and Vauxhall all made major investments last year, bringing total investment in the sector to £4.7 billion. These improvements also enhanced productivity, with a new vehicle being rolled of a production line every 20 seconds.

In addition, investment in new facilities, such as robots, reached £4.7 billion.

SMMT calculates that productivity has risen from an average of 9.3 vehicles built per worker fiver years ago to a current rate of 11.5 vehicles. This means the average worker generates £440,000 in turnover – these figures are based on the 158,000 people directly employed in vehicle manufacturing.

Commenting on the report's findings, chief executive of the SMMT Mike Hawes said that the UK should be proud of its achievements. However, he also warned that the international market was becoming increasingly competitive.

He explained that the new government is supportive of the automotive sector and, in meetings with business minister Sajid Javid, he had indicated the sector's targets of increasing productivity, innovation and exports aligned with the Conservative party's own priorities.

"You can never underestimate the power of politicians going out to bat for the country in a competitive global market. Other countries are very keen to attract manufacturers," Mr Hawes said.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.