U.K. Making Gains With Japan

Demand for Japanese car brands in the U.K. has risen 38.2% in the past five years, with 2017 year-to-date sales reaching 352,824 units – almost 100,000 more than in the same period five years ago.

Releasing the figures, the Society of Motor Manufacturers and Traders says trade between the Japanese and U.K. automotive industries also is as strong as ever in the relationship’s 36th year.

U.K. production bound for Japan rose 34.5% to 12,656 units in the first half of this year, making the country Britain’s sixth-biggest export market, and the second-biggest in Asia after China.

The SMMT says the growth is driven by Japanese motorists’ increasing appetite for the U.K.’s growing range of premium, luxury and high-performance models. After Germany, the U.K. is the European Union’s second-biggest manufacturer of these premium aspirational products.

The Japan-U.K. automotive manufacturing relationship dates to 1981, when Honda set up a joint venture with British Leyland to develop and produce the Honda Ballade, combining a Honda engine and transmission with a British Leyland body.

By 1989, Honda was making engines at Swindon and five years later, the plant began producing the Civic. In 1986, Nissan became the first Japanese automaker to open a British plant, in Sunderland. In 1992, Toyota entered the market with a factory at Burnaston in Derbyshire, where the Avensis and Auris Hybrid models now are built.

Japanese component manufacturers have followed. Japanese-owned suppliers with operations in the U.K. include five of the world’s top 20: Aisin Seiko, Calsonic Kansai, Denso, Sumitomo Electric Industries and Yazaki.

SMMT CEO Mike Hawes, speaking at the Tokyo auto show, says these companies were attracted to the U.K. by its large automotive market, proximity to mainland Europe and strong government support.

Japanese-owned plants account for 47.7% of U.K. car production and export to markets worldwide, with the Avensis and Honda Civic Type R even sold back to Japanese buyers.

“World-class engineering and products, government collaboration and huge investment have helped U.K. automotive become a global success story,” Hawes says in a statement. “However, for our relationship to benefit post-Brexit, the U.K. will need to secure trade agreements with both the EU and Japan, underlining the importance of securing the right deal during Brexit negotiations.”