2020 a bleak year for UK automotive, but outlook is brighter

Following the news from the SMMT that UK car manufacturing output fell 29.3% in 2020 to 920,928 units, the lowest total since 1984;

David Leggett, Automotive Editor at GlobalData, a leading data and analytics company, offers his view:

“The considerable decline for the year in the UK is mainly explained by the loss of export volume as the effects of the pandemic hit vehicle markets across the world. GlobalData estimates that the world’s light vehicle market fell back by 15.6% to finish on 75.1 million in 2020, a decline that would have been much heavier but for a strong recovery in China.

“2020 is clearly a year the UK automotive industry will want to forget. Besides the adverse effects of the pandemic at home and abroad, confidence and investment were also hit by Brexit uncertainty.

“There are some shards of light in the gloom though. Export demand for UK manufacturers will be picking up in 2021. GlobalData forecasts the global light vehicle market at 85.4 million units in 2021, 13.7% ahead of 2020’s pandemic-hit total.

“A large part of Brexit uncertainty – especially surrounding the risk of new tariffs on parts and vehicles traded between the UK and EU – has also been lifted. Nissan’s decision to commit to its Sunderland plant as a growth pole for electric vehicles will also boost confidence in the UK’s automotive industry.

“As vaccines roll out and markets recover, car output in the UK should move up to at least a million units in 2021, with the prospect of a larger gain in 2022 as the global economy strengthens further.

“Of course, uncertainties remain, but companies in the UK are now tentatively planning for a gradual recovery to volumes that should gather pace through the course of 2021.”

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