United Kingdom Autos Report Q1 2012

British luxury carmaker Jaguar Land Rover’s plans to invest close to GBP350mn in a new engine plant in Wolverhampton over the next two years comes as yet another confirmation of the emerging face of UK autos manufacturing as a hub for high-end production. However, in its latest United Kingdom Autos Report Q1 2012, BMI prescribes the promotion and diversification of a local suppliers' base, an overhaul of the regulatory set-up and the promotion of local R&D as crucial elements for long-term sustainability and growth of the autos market.
In 2011, UK production looks set to achieve BMI’s expected growth rate of 5.2% year-on-year (y-o-y), with eleven-month production reaching 1.36mn units – up 5.4% compared with the same period in 2010. Growth was mainly led by a 15.5% y-o-y increase in export demand during the same period to nearly 1.11mn units.
However, given that we expect a significant slowdown in Western European autos demand during 2012, we believe carmakers will be cautious about significantly improving their production volumes. We accordingly limit our production growth forecast for the whole of 2012 to 2.6% y-o-y at 1.50mn units. In the medium to longer term, commitments made by Jaguar Land Rover, BMW and Nissan Motor make us optimistic enough to forecast a near-complete recovery in the manufacturing segment to pre-crisis levels. We are currently forecasting output to reach 1.65mn units in 2016.
On the demand side, however, BMI expects private consumption to remain subdued for some time in the near future as households remain under considerable deleveraging pressure and unemployment remains stubbornly high. Passenger car sales growth will be limited to 2.1% y-o-y during 2012, marking only a partial recovery compared with a 4.5% y-o-y contraction in 2011. The commercial vehicles segment will suffer from the heightened degree of uncertainty about the global economy, deterring the corporate sector from largescale investment. The result will be a significant slowdown in commercial vehicle sales from the 18% y-o-y growth expected in 2011 to only 4.8% y-o-y in 2012.
It was the UK’s relative strength in the manufacturing sector that has helped solidify its second position in BMI's risk-reward ratings for the autos industry in Europe. We see strong reasons to believe that the country will maintain its position in the ratings.
A joint report presented by the Engineering Employer's Federation and the Society of Motor Manufacturers and Traders has called for an internationally competitive R&D tax credit system and estimates that the change could yield GBP390mn in R&D investment a year and boost total economic output by GBP336mn in the short term.
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Executive Summary 5
SWOT Analysis 6
UK Autos Industry SWOT 6
UK Political SWOT 7
UK Economic SWOT 8
UK Business Environment SWOT 9
Global Overview 10
Regional Overview FTAs Will Boost Already Strong Import Sales 13
Table: Europe – Top Automotive Suppliers Sales By Region (US$mn), 2010 14
Business Environment Analysis 16
Macroeconomic Forecast 20
Table: United Kingdom – Economic Activity 22
Industry Forecast Scenario Domestic Sales 23
Table: UK Autos Sector – Sales 23
Production 25
Table: UK Autos Sector – Production 25
Trade 27
Table: UK Autos Sector – Trade 27
Economic Contribution 28
Table: UK Auto Sector – Economic Contribution 28
Market Overview 29
Industry Analysis 30
Passenger Cars – Forecast & Analysis 34
Table: United Kingdom Autos – Passenger Car Segment 34
Key Players 36
Table: UK – Top 10 Players, 2009/2010 36
Table: Passenger Car Sales 36
New Investment 37
Commercial Vehicles – Forecast & Analysis 42
Table: United Kingdom Autos – Commercial Vehicle Segment 42
Key Players 43
Table: UK – Top 10 Players, Light Commercial Vehicle Sales, 2009/2010 43
Table: UK – Medium Commercial Vehicle Sales, 2009/2010 44
Table: UK – Top 10 Players, Heavy Commercial Vehicle Sales, 2009/2010 44
Buses And Coaches 45
Table: UK – Buses and Coaches Sales, 2009/2010 45
Company News 46
Motorcycles – Forecast & Analysis 47
Table: United Kingdom Autos – Motorcycle Segment 47
Segment News 49
Suppliers – Analysis 51
Company Profiles 54
Ford Motor 54
Vauxhall Motors 55
BMI Methodology 56
How We Generate Our Forecasting Model 56
Sources 57
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