Full speed ahead for Britain’s motor manufacturers

While the rest of Europe is misfiring amid the eurozone crisis, our motor manufacturers are getting into top gear to meet growing demand

Car sales on the continent may be stuck in reverse, but on this side of the Channel our love affair with the automobile is on the up.

New figures out yesterday show the EU is operating a two-speed vehicle economy, with Britain revealed as the only major market to grow last month.

The number of new cars sold in the UK accelerated by 11.3 per cent to 149,191 in November, compared to a year earlier, against a backdrop of a 10.3 per cent slowdown across Europe, according to ACEA, the European Automobile Manufacturers' Association.

Not only did sales growth in the UK far outstrip Europe as a whole, but it even eclipsed Germany, which recorded a 3.5 per cent decline last month, even if it did buy two-thirds more cars than Britain – with 269,144 new vehicles registered.

Sales in lighter-weight industrial powers fell much further still, with Spain and Italy both down by just over a fifth, Portugal by a quarter and Greece by 47.2 per cent. Even France saw its sales slide by 19.2 per cent last month, according to ACEA.

"The UK is a bright spot, but that is largely because the rest of Europe is struggling so much and because there is a huge amount of pent-up demand after several years of much-reduced car sales. Cars do wear out eventually," said IHS Automotive analyst Colin Couchman.

UK car sales were 5.4 per cent higher in the first 11 months of the year, according to ACEA – compared to a 7.6 per cent decrease across Europe – and are set to hit 2.04 million by the end of 2012.

The Ford Fiesta has been the biggest-selling car in the UK this year, followed by the Vauxhall Corsa and the Ford Focus, while Jaguar Land Rover has recorded a 20 per cent jump in UK sales to a new record for the country in the first 11 months of 2012.

Even with this relative burst of activity, UK sales this year will still be about 15 per cent short of the 2.4m they hit in 2007 before the financial crisis decimated demand. However, its sales increase so far this year still looks impressive when compared to the decline in Europe.

"Europe probably didn't see such an immediate dip as the UK, but they are going into it now, so they don't have the benefit of the pent-up demand. The eurozone debt crisis also means that their economic circumstances are more difficult than ours," said Paul Everitt, chief executive of the UK's Society of Motor Manufacturers and Traders (SMMT), who also believes that the UK's economic loss has, to a degree, become its car market's gain.

"Where else are you going to put the money in the UK? Houses aren't selling and interest rates are very low, which makes saving quite unattractive. And the stock market has flatlined," he said.

He argues that rising pump prices have provided another "trigger" because newer models are 10-15 per cent more fuel efficient than older cars, increasing the business case for buying.

The UK car market may have been given an additional shot in the arm by payouts to victims of the payment protection insurance (PPI) scandal, who have received more than £7bn in the past two years, according to SMMT.

The divergence between the UK and the rest of Europe is also apparent in car manufacturing.

Opel became the latest victim of weak European demand this week, as its owner, General Motors, said it would end car production at one plant in Germany in 2016.

By contrast, money has been pouring into the UK car market, which has received an unprecedented £6bn of investment in the past two years.

British car production rose by 9.2 per cent in the year to the end of November, exporting 82 per cent of the vehicles it made, according to the latest SMMT figures, published on Thursday.

The jump in UK production continues a trend which has seen the country's ailing industry rebounding, even if the vast majority of the carmakers are now owned by overseas operators.

The SMMT expects the UK to produce 1.5 million cars this year, up from 1.34 million in 2001, but still well below the peak of 1.92 million in 1972. However, Mr Everitt is confident the UK can quickly set a new record of 2 million by 2015, as the recent spate of investment bears fruit. Britain will have its work cut out to achieve this level of production, but it will be helped by the buoyant US car market, where sales have jumped 13.9 per cent so far this year, on the back of a multi-billion dollar industry bailout.

The US is Britain's third-biggest export market, accounting for 7.5 per cent of its overseas sales. Europe is the biggest market, followed by Russia in second place and China fourth.

The divergence in fortunes between the UK and the rest of Europe is likely to continue next year, with SMMT forecasting that car sales will be "broadly flat" compared to this year with modest growth in 2014, while Europe as a whole will be flat "at best", with many of its markets continuing to shrink.

As a spokesman for ACEA put it: "Consumer confidence is stronger in the UK than in Europe. It has not been hit as hard as a lot of other countries."

As if to underline his point about the fragility of the eurozone economy, new data out yesterday showed its recession has deepened in the fourth quarter after the block's private sector contracted for the 11th-straight month in December. But with the UK facing the prospect of a triple-dip recession, we can't afford to be complacent.

News
Jeremy Paxman has admitted he is a 'one-nation Tory' and complained that Newsnight is made by idealistic '13-year-olds' who foolishly think they can 'change the world'.
peopleThe idea has been greeted enthusiastically by the party's MPs
News
Michael Buerk in the I'm A Celebrity jungle 2014
people
Voices
File: David Cameron offers a toast during a State Dinner in his honour March 14, 2012
voicesAnd nobody from Ukip said babies born to migrants should be classed as migrants, says Nigel Farage
Arts and Entertainment
Avatar grossed $2.8bn at the box office after its release in 2009
filmJames Cameron is excited
PROMOTED VIDEO
Arts and Entertainment
Stik on the crane as he completed the mural
art
News
Happy in his hat: Pharrell Williams
people
Arts and Entertainment
Stella Gibson is getting closer to catching her killer
tvReview: It's gripping edge-of-the-seat drama, so a curveball can be forgiven at such a late stage
News
Brazilian football legend Pele pictured in 2011
peopleFans had feared the worst when it was announced the Brazil legand was in a 'special care' unit
News
i100(More than you think)
Sport
Brendan Rodgers seems more stressed than ever before as Liverpool manager
FOOTBALLI like Rodgers as a manager but Liverpool seem to be going backwards not forwards this season
News
ebooksNow available in paperback
News
The Magna Carta
archaeologyContemporary account of historic signing discovered
News
Phyllis Dorothy James on stage during a reading of her book 'Death Comes to Pemberley' last year
peopleJohn Walsh pays tribute to PD James, who died today
Sport
Benjamin Stambouli celebrates his goal for Tottenham last night
FOOTBALL
Life and Style
Dishing it out: the head chef in ‘Ratatouille’
food + drinkShould UK restaurants follow suit?
News
peopleExclusive: Maryum and Hana Ali share their stories of the family man behind the boxing gloves
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Argyll Scott International: Service Desk Analyst

£20000 - £22000 per annum: Argyll Scott International: Service Desk Analyst Re...

Argyll Scott International: 2x Service Desk Analyst

£20000 - £22000 per annum: Argyll Scott International: Service Desk Analyst Re...

Recruitment Genius: Senior Execution Trader

£30000 - £250000 per annum: Recruitment Genius: A global Rolling Spot FX, Comm...

Citifocus Ltd: ACA - Financial Reporting

£Attractive Package: Citifocus Ltd: Chartered accountant (ACA or CPA), must be...

Day In a Page

Homeless Veterans Christmas Appeal: ‘We give them hope. They come to us when no one else can help’

Christmas Appeal

Meet the charity giving homeless veterans hope – and who they turn to when no one else can help
Should doctors and patients learn to plan humane, happier endings rather than trying to prolong life?

Is it always right to try to prolong life?

Most of us would prefer to die in our own beds, with our families beside us. But, as a GP, Margaret McCartney sees too many end their days in a medicalised battle
Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night - is that what it takes for women to get to the top?

What does it take for women to get to the top?

Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night and told women they had to do more if they wanted to get on
Christmas jumper craze: Inside the UK factory behind this year's multicultural must-have

Knitting pretty: British Christmas Jumpers

Simmy Richman visits Jack Masters, the company behind this year's multicultural must-have
French chefs have launched a campaign to end violence in kitchens - should British restaurants follow suit?

French chefs campaign against bullying

A group of top chefs signed a manifesto against violence in kitchens following the sacking of a chef at a Paris restaurant for scalding his kitchen assistant with a white-hot spoon
Radio 4 to broadcast 10-hour War and Peace on New Year's Day as Controller warns of cuts

Just what you need on a New Year hangover...

Radio 4 to broadcast 10-hour adaptation of War and Peace on first day of 2015
Cuba set to stage its first US musical in 50 years

Cuba to stage first US musical in 50 years

Claire Allfree finds out if the new production of Rent will hit the right note in Havana
Christmas 2014: 10 best educational toys

Learn and play: 10 best educational toys

Of course you want them to have fun, but even better if they can learn at the same time
Paul Scholes column: I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season

Paul Scholes column

I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season
Lewis Moody column: Stuart Lancaster has made all the right calls – now England must deliver

Lewis Moody: Lancaster has made all the right calls – now England must deliver

So what must the red-rose do differently? They have to take the points on offer 
Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game