UK Car Industry Accelerates As Europe Brakes

The extent to which the UK car production industry is bucking the slowdown in Europe is laid bare in figures suggesting a record-breaking performance in 2012.

Figures from the industry body the SMMT show that UK car manufacturing achieved record exports of more than 1.2 million last year - a rise of 8% on 2011.

Total vehicle output from the country's car plants also rose by the same margin to its highest level since 2008.

The total number of cars produced increased by 9% to 1.46 million - rising 6% in December alone.

Paul Everitt, SMMT Chief Executive said: "2012 was a very good year for UK car production with record levels of exports and volumes at their highest since 2008.

"The outlook for 2013 remains positive with demand in many faster growing global markets offsetting the continued weakness in European economies.

The £6bn of investment committed to UK facilities, new model programmes and R&D (research and development) signals a bright future and many new opportunities for companies in the supply chain."

But he cautioned: "These remain extremely challenging times and it is essential industry and government continue to work together to secure long-term industrial growth."

Analysts say the UK has outperformed the market because it is largely making good quality vehicles that remain in strong demand.

Luxury brands including Land Rover models have sold particularly well in China and Russia while Nissan has invested huge sums at its Sunderland plant, creating new models with high export demand.

However it is not all good news, as while Honda recently announced 800 job losses in Swindon, there remains speculation that Vauxhall's operations could yet pay a price as its owner GM Europe struggles.

It was revealed on Wednesday that European car sales fell 16% in December alone - the industry paying the price for the effects of the euro debt crisis.

There was a fall of 8% over the course of 2012 with demand plunging in nations such as Greece, Portugal, Spain and Italy.

News of the UK's success was welcomed by the Business Secretary, Vince Cable.

He said the figures were "a great tribute to our manufacturing strengths, particularly in the face of challenging trading conditions in Europe and strong international competition".

He went on: "The UK is achieving success by making products that are in demand across the world.

"We have a diverse and innovative automotive sector with some of the most productive plants in the world and a flexible, skilled and committed workforce.

"The Government is creating a highly supportive business environment to ensure that UK manufacturers continue to flourish as well as encouraging further investment in the UK automotive sector, including the supply chain.

"There is no room for complacency and to build on this competitive advantage we are working jointly with the auto sector on a long-term industrial strategy."