U.K. Auto Industry’s 2015 Growth Robust, Report Says

The U.K. automotive-manufacturing sector’s profits rose 7.3% to a record £71.6 billion ($96.4 billion) in 2015 with the additional value generated for the region’s economy up 3.8% to £18.9 billion ($25.4 billion).

The Society of Motor Manufacturers and Traders says in a new report vehicle production rose 5.2% to 1.7 million units last year as the industry added 17,000 jobs to raise the total to 814,000.

It says despite this, the industry’s environmental impact was reduced, with waste-to-landfill down 24.2% and average new-car carbon-dioxide emissions falling 2.6% to 121.4 g/km of CO2.

Those employed directly in manufacturing grew from 161,000 to 169,000, with the average manufacturing worker generating more than £110,000 ($147,500) in value-added to the British economy.

The report was released June 22, the day before a referendum on whether the U.K. should drop out of the European Union was approved, 52%-48%. Negotiating the U.K.’s formal withdrawal from the EU could take up to two years, during which time the region will remain subject to EU laws.

The SMMT’s 17th annual sustainability report makes no reference to the outcome of the so-called Brexit vote, but the trade group makes clear its support for continued U.K. membership in the EU.

SMMT CEO Mike Hawes says the U.K. automotive industry is delivering record turnover, record productivity and more jobs.

“This success has been due to unrestricted access to the single market, input to EU legislation to safeguard the interests of U.K. automotive and the ability to recruit talent from abroad,” Hawes says in a statement.

“Our growth depends on certainty and continued open and reciprocal access to the 100-plus markets with which the U.K. automotive industry so successfully trades.

“This is not just finished cars but components, technologies and the wider automotive value chain. Any risks and uncertainty to these fundamental benefits need to be addressed head-on by U.K. government.”

Hawes says that with an estimated 5,000 vacancies across the industry unfilled due to a shortage of available skills, companies are investing heavily in developing the workforce of the future.

R&D Spending Among Records Set in 2015

Investment in R&D by the industry also reached a record high of £2.5 billion ($3.4 billion) in 2015 and now represents 12% of the region’s total R&D spend.

The SMMT says the figures are further evidence of the U.K.’s status as a global automotive leader, as production and sales of locally built vehicles continue to grow both at home and abroad. Sales of cars and commercial vehicles totaled 3.01 million units last year, according to WardsAuto data, making the U.K. Europe’s second-largest automotive market after Germany.

The report says vehicle-manufacturing output is up more than 10% so far in 2016. Last year almost 1.6 million cars were made in the U.K., the highest number in a decade.

The SMMT says its supply-chain members plan to spend £225 million ($303 million) on new jobs, machinery and new product development in the next three years.

The report says the U.K.’s vehicle-service and -repair sector is one of the most competitive in Europe, with British motorists spending £21.1 billion ($28.4 million) a year looking after their cars, 12% above the global average.

“These developments mean the sector is well-placed to meet increasingly stringent environmental targets, as well as take advantage of opportunities from emerging alternative-fuel and connected- and autonomous-vehicle technologies.” Hawes says.