UK Auto Industry

The UK motor vehicle market consists of passenger vehicles and trucks. Passenger vehicles comprise cars and utility vehicles.

Market size of the UK auto industry

The UK auto industry posted a 1.97 percent increase in motor vehicle registrations, amounting to sales of 2.94 million units in 2003. Passenger vehicle sales stood at 2.58 million units (up 0.6 percent) while light trucks touched 0.36 million units.  The US auto industry was the world leader, with sales of 16.93m units.  Meanwhile the Europe auto industry registered sales of 15.63m and the Japan auto industry had sales of 5.18m. Out of the most rapidly developing nations, the China auto industry had the largest amount of sales in 2003 at 4.44m units, and the India auto industry saw sales of 1.17m units.

GDP and motor vehicle growth in the UK auto industry

Second to Germany, the UK is the next largest automotive market in Europe. In 2003, 17 percent of the European new vehicle registrations took place in the UK auto industry. The consistently high level of sales made in the UK market can be attributed to the following factors: widespread use of credit by UK households stimulated by low interest rates, wealth effect caused by soaring property prices, lower unemployment and highly competitive vehicle prices. In the UK it seems that GDP growth is not directly correlated with motor vehicle growth, see figure 24. Purchase full report here.

Passenger vehicles and truck sales in the UK auto industry

In 2002, the UK auto industry recorded passenger vehicle sales of 2.56 million units to become the second largest new car market in Europe after Germany. Imported cars constituted 77 percent of the sales in 2002. In 2003, the market grew marginally by 0.6 percent.. For the fourth consecutive year, the passenger vehicle industry had a positive growth rate, finishing the year with sales of 2.58 million units.

In 2002, private customer registrations grew marginally by 2 percent whereas business registrations grew by 10 percent and formed 9 percent of the market. In 2003, private registrations grew by 2 percent, whereas fleet sales declined by 2 percent. Meanwhile, business buyer registrations continued to grow and accounted for 10 percent of the market in 2003.

Diesel vehicles continue to increase their share of the UK market. From 1999 to 2003, diesel vehicle volumes more than doubled and still continue to fuel market growth. Improved technology and the wider availability of more dynamic models, coupled with tax incentives, have helped diesel car volumes to climb. A total of 704,637 units were sold in 2003, which accounted for 27 percent of the total vehicle sales. The Ford Mondeo was the top selling diesel car with volume sales of 60,046 in 2003 (see Ford profile).

Sales of light commercial vehicles accounted for 84 percent of the UK truck market in 2003. The market grew steadily till 2002 before accelerating to 14 per cent growth in 2003, see figure 28. Strong commercial vehicle registrations reflect good business-based demand.

Growth in medium and heavy-duty commercial vehicles market broadly mirrors economic trends. In 2001, the market rose by 2.6 percent over 2000 levels to 55,573 units, the best performance since 1989. In 2002, sales fell due to the down turn in the economy and low business confidence. The revival of the UK economy in 2003 saw sales post a 7 percent jump to touch 55,590 units.

Major players in the UK auto industry

Most players, with the exception of General Motors (see General Motors profile), the Japanese majors and the Hyundai’s subsidiary, Kia Motors, saw sales volumes declining in 2003. Ford continued to lead the passenger vehicle segment even though its sales declined by 5.5 percent. The Ford Focus remained the best-selling car in the UK.

Vauxhall, a subsidiary of General Motors, recorded a growth of 2.4 percent in sales on the back of increased registrations from fleet operators. Vauxhall’s fleet sales represented 21 percent of the highly competitive fleet market, an improvement of 1.2 percent over 2002, and for the first time, General Motors has overtaken Ford in this segment. Peugeot’s profitability was affected by the euro’s appreciation against the pound. Despite a fall in sales of 11.5 percent, Peugeot remained the fourth largest player in the passenger cars segment with sales of 184,940 units in 2003. . In 2003, sales of Renault (see Renault profile) declined by 2.70 percent while that of Volkswagen marginally increased by 0.02 percent.

The expansion of its product range helped Ford retain the lead position in the UK’s light commercial vehicle market. Ford’s dominance can be understood by the fact that the total sales of its nearest competitor are less than 60 percent of its own sales. The sales decline that Ford suffered in trucks below 1.8 tons was offset by increased sales in trucks in the 1.8 - 3.5 tons category.  DaimlerChrysler (see DaimlerChrysler profile) operates only in the 1.8 - 3.5 tons category, where it introduced several new products in 2003. Its sales increased by 6 percent in 2003 to 22,264 units, see table 15. The Renault Group recorded a 23 percent increase in sales in the 1.8 - 3.5 tons category, but sales from trucks below 1.8 tons category declined marginally.

In the UK, a total of 55,590 trucks (>3.5 tons) were registered out of which 85 percent of these vehicles were imported. For instance, Paccar Group sold over 93,000 trucks in the world market, and 12,688 units were in the UK itself.  A steady increase in customer demand for its leading brand DAF and the appreciation of the euro against the dollar saw its UK revenue soar to USD302 million. DaimlerChrysler maintained its second position with sales of 10,153 units in 2003.

The biggest winner was Scania with volumes showing a 30 percent jump for the calendar year. Several major orders from large transport companies helped Scania boost its market share to 12 percent in 2003.  Scania also emerged as the world’s fourth largest maker of heavy trucks. Volvo is the world’s largest heavy truck manufacturer and 6 percent of its sales come from the UK. However, Volvo’s market share dipped from 11.28 percent in 2002 to 10.98 percent in 2003.

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