The automotive industry includes those companies that are involved in the production of motor vehicles, its body parts and engines. The main products that come under the sector are lightweight vehicles like vans, buses, motorcycle, light trucks and large transport trucks.
In the last decade, the UK automotive industry has changed from an unstable sector to a fully competitive one. They car productivity is of top rankings in the world. Therefore, this industry was profitable and self-sustainable since the beginning. This highly integrated industrial system offers access to customers worldwide. Moreover, the UK has also experienced technological improvements in the previous decade.
The history of this industry dates back to 1890s when people started using motorcars. However, in the beginning, the UK imported them from other states. The origins of the British motor industry dates back to the late 1880s. The London-based practising engineer Frederick Simms along with his friend Gottlieb Daimler invented a successful model for a high-speed petrol engine in 1885. The early developments for a motor vehicle in the UK were stopped by an introduction of Locomotive Acts in the 19th century which was later lifted.
Herbert Austin developed the first British four-vehicle car in 1900. He started UK's largest car manufacturer named Wolseley Motors that produced almost 14000 vehicles in the UK. However, a new factory overtook this company in 1913. The wars years of 1914–1918 virtually ceased the car production. In 1932, the UK surpassed France as the largest automobile manufacturer in Europe.
Car production extends to the commercial and military vehicle production after the Second World War. Furthermore, many automobile plants were transformed into aircraft and aero-engine manufacturing. In 1937, the UK became the world's largest motor vehicle exporter by providing 15% of world vehicle exports. Moreover, in 1950, the UK produced 52 % of the world's exported cars. It was a year in which 75 % of British car production and 60 % of its commercial vehicle production got exported.
In 1960, the UK had dropped from being the second-largest producer of motor vehicles in the world to third place. It happened because some American, Japanese and European competitors have reduced the cost of their motor vehicles in the market. Later, the UK industry further declined to number four in 1966. Throughout the 1960s, the prominence of foreign cars in the UK market growing gradually. The sector got dominated by various other companies under which, Japanese cars, particularly, has taken the lead. The period from 1980-2007 witnessed a continuous struggle by some famous UK industrialists to regain their lost position and value.
The industry achieved 8.8% of European output in 2007, down from 9.6% in 2000. The manufacturing and automotive sector have shown an increased trade deficit in recent years. The overall UK share of the world's vehicle production has dropped from 3.34% in 1995 to 2.43% in 2007. However, the sector output has grown since 2009.
After 2013, the country again lifted its status to the second-largest vehicle market and fourth largest vehicle manufacturer in the European Union. Moreover, 77% of the vehicles also got exported. Currently, the automotive industry accounts for 4% of UK GDP and providing jobs to over 700,000 people in the UK. It is even playing a critical part in the UK economy with a turnover of over £ 82 billion and an added value of £ 20.2 billion.
Besides this, vehicles and engines manufactured in the UK have been recognized domestically and internationally for their high quality. Similarly, it also accounts for 12 % of total UK product exports and spends £ 3.65 billion annually in automotive R&D. Over the next decade, the industry has production plans in place that provide visibility in its growth.
The industry also has access to high-growth markets and the broad EU market, which is a vital element for its progress in the future. However, the Brexit had affected this industry in many ways, but its highly globalized and integrated nature paves the way for various opportunities for this industry to grow in future.