UK car industry needs stabilization in 2020, says GlobalData

Following the news today that UK car output declined by 14.2% in 2019 to 1.3 million units – the lowest annual total since 2010;

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

“Last year was clearly a difficult one for the UK’s automotive industry. There were pressures at home with the UK car market in decline, but lower shipments to major export markets is more of a concern for manufacturers such as Jaguar Land Rover.

“The US accounts for almost a fifth of UK car exports, and shipments to the US were down by almost 10% last year. China accounts for a smaller proportion of UK car exports, but it is the world’s largest car market and seen as a strong long-term growth opportunity. However, shipments of UK-made cars to China were down by a hefty 26% last year.

“As far as 2020 goes, there are continued challenges ahead. The US will remain a difficult car market with overall demand flat or slightly declining. China, too, will be a tough market as its economy will continue to slow (not helped by the coronavirus crisis which will dent it further).

“UK car manufacturers are hoping that negotiations between the UK and EU regarding a permanent future trading relationship will go smoothly to secure tariff-free trade-in vehicles, as well as no additional burdens or costs. With almost 55% of the UK’s total car export shipments heading for the EU27 – by far the largest export market destination – the competitive implications of any disruption to those trade flows, for parts as well as vehicles, are stark.

“The UK’s automotive sector needs to continue to secure increased investment, especially in emerging key technology areas such as electrification – something that will be helped by keeping the overall level of car manufacturing activity stable and by maintaining confidence.”  

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