A leading UK automotive academic is stressing the need for the British supply sector to take advantage of the encouraging domestic scene that could see production reach up to 2.7m units by 2019.
Addressing last night’s (5 December) Welsh Automotive Forum dinner near Cardiff, Professor Emeritus, Garel Rhys, painted a bright future for the UK sector as it continues to buck the gloomy outlook across most of Europe and stressed the need for suppliers to be “up for it.”
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“The famous GBP3bn (US$4.9bn) of components that are there to be redistributed to the British component industry – if we go up to 2.6m vehicles that will be even more than GBP3bn,” he said.
“The British motor industry buys in around GBP40bn of components, so actually GBP3bn is relatively modest. In other words, the British component industry should be up for it. It is a multiplier that drips through British industry.”
Despite Rhys’ tub-thumping appraisal of the UK auto industry the academic nonetheless laced his comments with several caveats – particuarly with regard to Europe – a Continent he described as “a mess.”
“Things are still difficult – we have not recovered from the recession fully,” he said. “In 2008, I did say this was going to be the worst economic downturn. We predicted there would be a recession that would go into the banking sector and it would be the worst since the [second world] war.
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By GlobalData“This year, we are very near the level of demand we had in 2008. Britain is the only market in Western Europe to show growth – for buses we are doing quite well – for trucks it depends on the economy. You can’t fool the truck buyer or the van buyer, so it is very heartening to see growth in commercial vehicles.
“By 2019 we will have another five years of steady growth. I think [by] 2019 it could well be 2.6m-2.7m [units].”
It appears the European market is bottoming out in terms of sales as battered economies slowly rebuild and consumers find the confidence – and credit – to repurchase – but there is still a significant way to go to recapture the heady days of six years ago, added the Emeritus Professor.
“In 2007, it was 17m [units],” he said. “Five million sales have disappeared from the European car market – growth down the swanny – it is no wonder the French are in real trouble.
Rhys also hailed the productivity of British automotive factories as one of the reasons behind the UK’s surge in performance.
“If things keep going on as they are and efficiencies we now see in British plants [continue], I would be very disappointed if we did not see around 2.4m – 2.6m cars by around 2016,” he said.
The academic insisted the automobile was going to form part of the industrial landscape for a considerable while yet. “The vehicle is not going the way of the gas lamp,” he said.
“Although it is astonishing, for an economist, I am looking at good news.”
