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UK Car manufacturing up 3.5% in 2014 H1

Mike Hawes, SMMT Chief Executive - UK Car manufacturing up 3.5% in 2014 H1

UK car production grew by 4 percent to 791,314 in the first six months thanks to new models, the Society of Motor Manufacturers and Traders (SMMT) said.

The first half of 2014 has seen 3.5% growth in UK car manufacturing. June alone saw 3.7% year-on-year growth to 136,419, which the Society of Motor Manufacturers and Traders attributes to increased demand in the UK.

The auto industry group said it expected growth to continue, but warned that this must be matched by a bolstering of the domestic parts supply chain.

Only about a third of the parts that go into locally made cars are manufactured in the UK. The government and industry have identified around £3 billion ($5 billion) worth of parts that could be produced domestically.

Most UK produced cars are exported however – so far in 2014, 625,459 of the 791,314 cars built here were exported.

Mike Hawes, SMMT Chief Executive. “With several manufacturers having started assembly of new models this year and billions of pounds of investment still to reach production fruition, this is an exciting time for the UK automotive sector. However, with this growth comes a need to bolster the domestic supply chain and address major skills shortages; both of which the UK industry is committed to addressing.”

Some 1.5 million cars were built in the UK in 2013, returning to levels seen before the 2008-2009 financial crisis after which production nose-dived.

Among the new models to roll off UK production lines in the past 12 months are a new Mini, Honda’s Civic Tourer, Nissan’s revamped Qashqai SUV and a new Range Rover Sport.

“With the Jaguar XE and the new Vauxhall Astra due to be launched early next year, we are on the threshold of a golden era of British car manufacturing,” said John Leech, KPMG’s UK head of automotive.

“We have firmed up our forecast for UK vehicle production and are now confident of seeing the 2 million vehicle barrier broken in 2017. This is exerting a powerful pull for supply chain companies as they re-evaluate the UK as a manufacturing location within their European production footprints,” Leech said.