Comments
British demand for Indian-made cars rose in the last year, while demand in India for British-made cars fell sharply during the same period as British car makers shifted more assembly operations to India.
British demand for Indian-made cars has long-outpaced exports to India, and 2017 was no exception as over 34,000 new cars from India were registered in the UK, according to the figures published by industry body, the SMMT. Sales of British-made cars plummeted by 66 per cent to 1,144.
While exports to Asia grew strongly (over 10 per cent) car production in the UK fell by 3 per cent in 2017 – the first decline in eight years, largely driven by a fall in domestic demand. The SMMT attributed the fall to ongoing Brexit uncertainty and concerns around the government’s future policy on diesel vehicles, following plans to ban the sale of cars with conventional combustion engines by 2040.
Brexit impact
Describing the fall as “disappointing”, SMMT CEO Mike Hawes said that while engagement with government had been positive, a lack of clarity around Brexit and the political and economic impact was affecting buying patterns as well as confusion around government policies on diesel cars.
Earlier this week, a leaked government reported highlighted the car industry as one likely to be particularly adversely affected by Brexit, particularly if Britain left the single market without a comprehensive free trade deal with Europe.
Export market
Europe continues to account for the biggest chunk of the auto export market (around 54 per cent last year), while £9 billion of the over £11 billion worth of components imported by Britain last year came from Europe. “Its important to maintain the benefits we currently enjoy,” said Hawes, adding that it was equally important that Britain maintained access to the beneficial trading relations that the EU had established with countries.
“We believe the UK government understands the automotive position and what we need to try and negotiate with the individual issues,” he said, pointing to the sector deal struck earlier this month, which he said highlighted the support and understanding within the government.
Earlier this month, JLR said that it would be temporarily cutting production at its Halewood plant following a review, citing Brexit and the diesel concerns. The SMMT expects British car production overall to continue to fall in 2017. Automotive investment has also fallen sharply, down to just over £1 billion last year, from a past average of £2.5 billion. “A lot of businesses are waiting to see what the future relationship will be with the biggest market…they need clarity,” he said.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.