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United Kingdom Autos Report Q1 2011

United Kingdom Autos Report Q1 2011

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Additional Information

Price	$530.00
Publisher	Business Monitor International
Date of Report	Jan 1, 2011

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Quick Overview

A serious inconsistency in UK’s electric vehicles (EV) programme came to light in November 2010 when
National Grid CEO Steve Holliday highlighted concerns that as more drivers use EVs, it could put pressure
on the UK’s electricity grid. The concern adds to existing woes that the UK lags far behind other countries in
terms of establishing EV charging points and also faces the embarrassing prospect of electricity shortages,
with around 15% of the country's generating capacity facing closure from as early as 2013.
BMI sees these concerns as a stark contrast to the 25% discount on EV purchases up to GBP5,000 offered by
the government in a bid to encourage EV sales. BMI, however, remains concerned about the underlying
weakness in consumer spending in the UK, after new passenger cars demand continued to fall for the fifth
consecutive month in November 2010. We expect this condition to continue well into 2011 as household
spending suffers in the wake of continued falls in house prices, while the loss of cheap credit and continuing
high unemployment (with the government's budget cuts fuelling fears over job security) will also keep a tight
lid on consumer spending. As such, BMI expects car sales in 2011 to fall over 5% year-on-year (y-o-y), to
1.92mn units. Although we expect sales to grow thereafter, the market may find it difficult to maintain any
growth higher than the average 2.4% y-o-y between 2012 and 2015.
From the point of view of production, the new Conservative-Liberal Democrat coalition government formed
in May 2010 has revealed its commitment towards supporting innovation in green technology and focusing
on electric vehicles. The market has so far shown a far more impressive recovery than the 24.3% y-o-y
growth anticipated by BMI for end-2010, thanks to production rising nearly 32% y-o-y to 1.15mn units
during the first 10 months of the year, according to the Society of Motor Manufacturers and Traders
(SMMT). While we expect the growth to continue for the remainder of the forecast period, BMI fears that a
complete recovery to pre-crisis levels may not be possible anytime during the forecast period. As such we
limit our production output forecast to only 1.62mn units by the end of 2015.
Although the competitiveness of the UK's manufacturing industry is a big attraction for carmakers looking to
increase production in Western Europe, BMI points out that the regulatory environment, along with currency
movements and material costs, will be important factors determining whether carmakers will undertake major
projects in the country.
Based on the competitiveness of its manufacturing industry and regulatory environment, the UK is in first
place in BMI's Business Environment Ratings for the auto industry in Europe. The extent to which operating
environments can affect carmakers has been illustrated by the 'landmark pay and conditions settlement' that
British carmaker Jaguar Land Rover (JLR) reached with labour unions in October 2010, enabling the
company to reverse its decision to close down one of its three plants in the UK.

Table of Contents

Executive Summary ........................................................................................................................................ 5
SWOT Analysis ................................................................................................................................................ 6
UK Auto Industry SWOT ....................................................................................................................................................................................... 6
UK Political SWOT ............................................................................................................................................................................................... 7
UK Economic SWOT ............................................................................................................................................................................................ 8
UK Business Environment SWOT ......................................................................................................................................................................... 8
Global Overview .............................................................................................................................................. 9
Table: BMI Core Views On Global Auto Sector ................................................................................................................................................... 9
Business Environment Ratings .................................................................................................................... 12
EMs Show off Potential ....................................................................................................................................................................................... 12
Table: Western Central And Eastern Europe Business Environment Ratings ...................................................................................................... 16
Industry Developments – Western Europe .................................................................................................. 17
Table: Overview Of Up-Front Price Support Measures ..................................................................................................................................... 19
European Suppliers In Global Rankings ............................................................................................................................................................. 20
Table: Europe – Top Automotive Suppliers Sales By Region (US$mn), 2009 ...................................................................................................... 20
UK Market Overview ...................................................................................................................................... 21
Vehicle Financing ............................................................................................................................................................................................... 22
Industry News ..................................................................................................................................................................................................... 23
New Investment ................................................................................................................................................................................................... 24
Industry Forecast Scenario ........................................................................................................................... 28
Production and Sales .......................................................................................................................................................................................... 28
Table: UK Auto Sector, Production – Historical Data And Forecasts, 2008-2015 .............................................................................................. 28
Domestic Sales .................................................................................................................................................................................................... 29
Table: UK Auto Sector, Sales – Historical Data And Forecast, 2008-2015 ......................................................................................................... 31
Motorcycles ........................................................................................................................................................................................................ 31
Table: UK Motorcycles Sector – Historical Data And Forecasts, 2008-2014 ..................................................................................................... 32
Trade .................................................................................................................................................................................................................. 33
Table: UK Auto Sector – Historical Data And Forecasts, 2007-2015 ................................................................................................................. 33
Economic Contribution ....................................................................................................................................................................................... 34
Table: UK Auto Sector – Historical Data And Forecasts ................................................................................................................................... 34
Macroeconomic Forecast ................................................................................................................................................................................... 35
Table: United Kingdom – Economic Activity ...................................................................................................................................................... 37
Competitive Landscape ................................................................................................................................ 38
Passenger Car Segment ...................................................................................................................................................................................... 38
Table: UK – Top 20 Players, January-July 2009/2010 ....................................................................................................................................... 38
Table: Vehicles Sold Under Scrappage Scheme (January-July 2010) ................................................................................................................. 39
Commercial Vehicles Segment ............................................................................................................................................................................ 39
Table: UK – Top 10 Players, Light Commercial Vehicle Sales, January-July 2009/2010 ................................................................................... 40
Table: UK – Medium Commercial Vehicle Sales, January-July 2009/2010......................................................................................................... 41
Table: UK – Top 10 Players, Heavy Commercial Vehicle Sales, January-July 2009/2010 ................................................................................. 42
Buses And Coaches ............................................................................................................................................................................................. 42
Table: UK – Buses and Coaches Sales, January-July 2009/2010 ........................................................................................................................ 43
Suppliers ............................................................................................................................................................................................................. 43
Company Monitor .......................................................................................................................................... 46
Ford Motor ......................................................................................................................................................................................................... 46
Vauxhall Motors ................................................................................................................................................................................................. 47
Country Snapshot: UK Demographic Data .................................................................................................. 48
Section 1: Population .......................................................................................................................................................................................... 48
Table: Demographic Indicators, 2005-2030 ....................................................................................................................................................... 48
Table: Rural/Urban Breakdown, 2005-2030 ...................................................................................................................................................... 49
Section 2: Education And Healthcare ................................................................................................................................................................. 49
Table: Education, 2002-2005 ............................................................................................................................................................................. 49
Table: Vital Statistics, 2005-2030 ....................................................................................................................................................................... 49
Section 3: Labour Market And Spending Power ................................................................................................................................................. 50
Table: Employment Indicators, 2000-2005 ......................................................................................................................................................... 50
Table: Consumer Expenditure, 2000-2011 (US$) ............................................................................................................................................... 50
Table: Average Annual Wages, 2000-2012 ......................................................................................................................................................... 51
BMI Methodology .......................................................................................................................................... 52
How We Generate Our Forecasting Model ......................................................................................................................................................... 52
Sources ............................................................................................................................................................................................................... 53