The UK car industry has seen a revival in recent times with a rise in output of 15% over the last two years as Germany and France have seen their output decline 3% and 13% respectively. An uplift in demand has come from maturing economies such as China, leading to Japanese car maker, Nissan, recently stating that it is currently running close to capacity at its Plant in Sunderland.
So it’s of no surprise that George Osborne has seen an opportunity to continue to grow a key strategic sector in the UK economy and is looking set to agree a deal which will mean a Government funding commitment of £1bn, which will be matched by the automotive industry.
The funding is thought to be part of the Chancellor’s plan to speed up the UK’s economic recovery and will be unveiled during this year’s Goodwood Festival of Speed together with the Government’s automotive strategy.
The UK car industry has suffered severe criticism and serious damage before the recent resurgence. It now sustains approximately 700,000 jobs, produces an annual turnover of £55bn and is responsible for 10% of the British exports as of last year.
The industry has been boosted by Jaguar Land Rover’s (JLR) dominance in the China and Asia-Pacific market, prompting record profits of £1.7bn along with Nissan’s similar performance in the same market.
The Society of Motor Manufacturers and Trade estimate that the UK could increase its output by 2016 to 2.2 million cars a year from 1.5 million in 2012. And if the current trend continues, Britain will produce more cars than their French counterparts by 2018.
Talking to the Telegraph at the SMMT automotive conference, Andy Palmer, Nissan’s Executive Vice-President said “You could see it happening [UK overtaking France] if UK plants are at full capacity, which they are not far off being.”
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