Car output fell in Britain for the second month according to the
latest Society of Motor Manufacturers and Traders (SMMT) data. The
decline has been blamed on a weakening demand for cars and vans
The output saw a drop of 5.8 per cent in September but the good
news is that 2012 still remains up 10.2 per cent over the year to
date. Manufacturers will need to consider looking to the
global market to maximise opportunities for growth if they are to
Matthew Freeman, Automotive Intelligence Specialist at CAP,
analysed the data, "It is important to remember that the UK
produces a relatively limited number of models, so changes on model
cycles, such as retooling for a new or face- lifted model can
impact volume for the entire industry.
"For this reason it is important not to attach too much
importance on short term production figures but to concentrate on
the longer term trends, which in this case, are far more
Compared to 2011, SMMT forecast a 1.6 per cent growth in new car
registration in 2012, with a further 1 per cent increase predicted
in 2013. Automotive manufacturing levels are expected to reach
pre-recession levels by 2014.
Mr Freeman added, "Looking to the future, and at SMMT's 2014
forecast, continuing global economic uncertainty, particularly in
the major European markets makes this a challenge and demand in the
key European markets is likely to remain subdued for some time yet
which is leading to concerns about manufacturing over
He noted that over the last three years the amount of
automotives being exported to non-EU markets had increased. By
broadening the market, UK based car producers may be able to
'weather the storm'.
Engineering group GKN is one such company to expand its market.
Despite being the largest faller in the FTSE 100 on Tuesday, 16
October, the Telegraph's Questor column gave it a 'hold' rating.
The rating reflects GKN's strategy to sell its products into
emerging markets that are likely to grow significantly in the
Paul Everitt, SMMT Chief Executive, agreed with this view,
"The strong demand for UK products outside of Europe and the
investment committed by major vehicle manufacturers will secure
future growth, although the coming months will be challenging for
companies at all levels in the supply chain."
Commercial Vehicle output also fell (20.2 per cent) in
September, as did engine production (12.8 per cent).
The decrease followed a fall in car output of 8.9 per cent in
August. Prior to this car output had risen for thirteen consecutive
months leading to hope that the sector was well on its way to
With the European market remaining uncertain it's important for
businesses to protect their financial assets by assessing the
credit risk along the supply chain. Continual monitoring of
suppliers and customers will enable them to transact with
confidence regionally, nationally and internationally.