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Cars built in the UK are becoming more British — but still lag behind European rivals

Alan Tovey
Jaguar Land Rover produces more than 500,000 cars a year at its UK plants  - Getty Images

Cars built in the UK are becoming more British, with a drive to increase the level of domestically produced components they contain paying off.

The finding comes in a new study by the Automotive Council, which revealed that 44pc of the parts used to build the 1.7m cars rolling off British production lines last year were sourced domestically.

This is up from the 36pc level achieved in 2011 and 41pc in 2015, raising the value of business to British suppliers to £12.7bn a year, up from £9bn when the provenance of parts was first investigated six years ago. However, it is still far below levels seen in Germany and France, believed to be about 60pc.

UK automotive parts trade

The Automotive Council — a joint government-industry body aimed at promoting the sector — has been keen to increase the level of domestically produced parts contained in UK-built cars as the country’s automotive sector enjoys a renaissance. Encouraging the “reshoring” of parts production has been a key part of this, and a strong manufacturing base helps encourage further foreign investment in the UK.

In 2016, the number of British-built vehicles hit a 17-year high and with about 80pc of output being sold abroad, increasing UK content helps cut the trade deficit, with cars being the country’s biggest source of goods exports. 

With the industry’s dependence on “just in time” manufacturing, which means that manufacturers do not keep large stocks of parts to hand, shorter supply lines are more cost effective and less likely to face disruption, helping ensure the sector’s health.

Workers at the BMW-owned Mini plant in Oxford produce more than 200,000 of the iconic cars a year Credit: Reuters

Higher UK content will also help Britain’s car industry meet “rules of origin” thresholds required to qualify for lower trade tariffs if Britain cannot negotiate a deal with the EU as it exits the trading bloc. 

Business Secretary Greg Clark said while the report “highlighted the sector’s good progress, there are many more opportunities for us to exploit”, adding the industrial strategy “will build on the automotive industry’s strengths”.

Mike Hawes, chief executive of Society of Motor Manufacturers and Traders, added: “The domestic supply chain is the backbone of UK automotive and its health is crucial to the success of the whole sector. While it is good news that British cars are becoming more British and reshoring efforts are enjoying success, the process takes considerable time.

“To grow our supply chain further, the long term competitiveness of the UK must be maintained. Collaboration with government has been an undoubted factor in the recent success and we hope to continue this approach to ensure the economic and trading conditions we currently enjoy are maintained.”