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Motor industry: statistics and policy

Published Tuesday, April 11, 2017

The motor vehicle manufacturing industry in the UK: statistics and policy.

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Key statistics:

  • The UK motor vehicle manufacturing industry contributed £15.8 billion to the economy in 2016, 0.9% of total output, but 9.4% of manufacturing output
  • The industry employed 155,000 people across Great Britain in 2015
  • 1.8 million vehicles were produced in the UK in 2016, 78% of which were exported
  • The value of exports totalled £31.5 billion in 2016, but imports totalled £40.3 billion, so a trade deficit of £8.8 billion was recorded
  • Car registrations reached an all-time high in 2016, with over 2.7 million new cars

 

The industry performed well in recent years, achieving strong growth in employment, production, economic output and exports. Nonetheless, the industry worldwide faces fundamental challenges, including profound shifts in global demand, the urgent need to tackle emissions and the advent of new technologies such as driverless cars.

In order to thrive, the UK motor industry must remain attractive to foreign investment compared with competitor countries. Brexit could radically alter the UK’s attractiveness, positively and negatively.

Brexit could bring benefits to the industry from new trade deals that the UK might strike with other parts of the world after it leaves the EU. At the same time, Brexit poses important risks to UK-EU trade.

The UK manufacturing sector is highly integrated with the rest of Europe, with large volumes of trade not just in final products, but also in component parts (the supply chain). For instance, the UK imported £13.4 billion’s worth of vehicle engines and parts in 2016, 80% of which came from the EU. The manufacturers’ trade body (EEF) and the automotive trade body (SMMT) have both called on the Government to protect that close integration.

The Government’s industrial strategy for the automotive sector focuses on the development of ultra-low emission, connected and autonomous vehicles. Against the backdrop of emission scandals, the diesel share of the new car market has started to decline, and is forecast to continue to do so.

Commons Briefing papers SN00611

Authors: Federico Mor; Jennifer Brown

Topics: Industry, International trade, Manufacturing industries

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