India drives Britains luxury car export boom

The rising popularity of Tata Motors owned Jaguar Land Rover (JLR) models led to a 15.8 per cent hike in car exports from the UK to India in 2016, the recent UK automotive industry figures released in London revealed. India is now the eighth largest Asian market for UK car exports with JLR's Land Rover Discovery Sport, Ranger Rover Evoque, Jaguar XF, Jaguar XE and Jaguar F-Pace among the top five most popular models with a growing number of “affluent buyers” in the country. The Society of Motor Manufacturers & Traders (SMMT), one of the UK's largest trade associations, said the Indian demand formed part of a wider 17-year high for British car manufacturing last year. “India is now the eighth biggest Asian market for UK car exports, with demand rising at a rapid rate as an increasing number of affluent buyers take advantage of a range of all new premium and luxury British-built cars. UK car exports to the country grew 15.8 per cent to 3,372 in 2016,” SMMT said in a statement. It also found that Indian-built car models accounted for 31,535 new car registrations in the UK, an uplift of more than 12.6 per cent on 2015. “India and the UK have a great history of collaboration in the automotive sector and it is essential we secure mutually beneficial trade relationships in the future. India is a growing market, for the moment largely for luxury vehicles. But we face high import tariffs which makes it more difficult to sell into India,” said Mike Hawes, SMMT chief executive. “It remains to be seen the kind of trade deal the UK may look to agree with India post-Brexit. But meanwhile, it is very much about producing the right product for the market, which is in the premium category,” he noted. Meanwhile, as many as 1,727,471 vehicles rolled off production lines in the UK last year from some 15 manufacturers, an 8.8 per cent rise in total car production in Britain compared to 2015 and the highest output since 1999. More cars are now being exported from Britain than ever before, which the SMMT highlighted was the result of investment made over recent years in world-class production facilities, cutting-edge design and technology and one of Europe's most highly skilled and productive workforces rather than any Brexit effect. Production growth in the UK was predominantly driven by overseas demand, with global appetite for British-built cars rising by 10.3 per cent to an all-time high of 1,354,216 - a second consecutive annual record. Around eight out of every 10 cars manufactured in the UK is now exported, bound for one of 160 markets worldwide. The European Union (EU) remains by far the country's biggest market, something that could be directly affected by the final trade deal struck as Britain exits the economic bloc. “Brexit is a significant challenge and we want our respective governments to support our industry. The last year was undoubtedly a very, very successful year for the industry but there is a lot of uncertainty with one of our biggest market, the EU,” added Hawes.

EU countries make up exactly half of the UK's top 10 individual global markets, with Germany leading, followed by Italy, France and Belgium. Furthermore, Europe supplies the majority of components (65 per cent) within UK-built vehicles, underlining the critical importance of tariff and barrier-free trade to future UK automotive production. The automotive industry is a vital part of the UK economy accounting for £71.6 billion turnover and £18.9 billion value added. With 169,000 people employed in manufacturing and 814,000 across the wider industry, it accounts for 12 per cent of total UK export of goods and invests £2.5 billion each year in R&D. Some 30 manufacturers build more than 70 vehicle models supported by 2,000 component providers and some of the world′s most skilled engineers. While the Make in India programme is proving a considerable pull factor for some UK-based automotive firms, the demand for India to lower its import tariffs has been a consistent one - both from the UK as well as the wider European Union (EU) market. As Britain negotiates its exit from the EU, the automotive sector will be among the key focus areas in any new India-UK free trade agreement (FTA).