UK Car Production Increased 15 Percent In February

The Society of Motor Manufacturers and Traders recently released its February 2011 UK vehicle production figures. According to the statistics, car production increased by more than 15 percent compared to February 2010.

However, commercial vehicle manufacture, usually considered an indicator regarding economic activity, experienced a small decrease.

During February 2011, the UK manufactured 111,983 new automobiles, compared to a February 2010 figure of 97,292. The decrease in production for commercial vehicles year-over-year was three percent. The production of engines experienced a strong 10.2 percent increase, mainly due to export demand.

SMMT Chief Executive Paul Everitt stated that engine and vehicle production in the UK are leading the recovery in the manufacturing sector.

Mr. Everitt pointed to higher export market demand for UK vehicles as indicating the competitiveness and quality of goods manufactured in the country. He believes that the forthcoming budget announcements will establish an auto industry investment climate.

Capital equipment, skills, and research and development should all benefit.

Though the uptrend in exports is positive, things are not as rosy in the local new car market. New vehicle sales in the UK have been declining consistently during the past few months. At the same time, there has been significant growth in the used car finance market.

This indicates that more UK consumers are choosing to purchase used vehicles rather than new ones.

New car manufacturers in the UK hope things will make a positive swing on the home front as the economy recovers. The increase in export demand has helped many of them endure this financial storm. However, they would like to see an improvement in the local market for new cars sooner rather than later.

Car finance companies agree, as they rely on profits from new car buyers. With the release of several eco-friendly  models over the next two years, new car ownership may become more affordable.