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Automotive insight: Decline in the UK market.

Posted about 2 years ago by Julia Williams
Pexels Photo 248539

Accounting for 14.4% of total UK exports, the automotive industry turned over approximately £82bn during 2018, making it one of the UK’s largest industries.

However, with only £90m invested between January to June 2019, it is clear the automotive industry is experiencing a downturn in growth.


Whilst decline has predominantly been attributed to Brexit uncertainty, equally worrying contributions come from:

A favourable trade agreement between the EU and Japan, which reduces economic barriers for brands like Honda and Toyota to produce and export from Japan.

A decline in favourability for diesel cars aligned with environmental concerns following the emissions scandal of 2015.

The growing popularity of electric cars and a failure of some brands to adapt fast enough to changing consumer trends.


Though painting a negative picture for the UK economy, it may be that these barriers to growth can also provide opportunities for development.

close up black and white tyre image

Climate

Market adaptability is one of the largest criticisms of the automotive industry, as some brands have not adapted fast enough to changes in consumer demand. Some reports suggest that some manufacturers have placed an emphasis on lobbying against climate action (or have not given it enough attention) rather than adapting processes to become more sustainable.

With 125% more electric cars being sold in 2019 (compared to 2018) it is clear consumer demand is increasing. The infrastructure to support these developments is not available, however. To meet demand it could be argued that the UK should invest in significant technological changes, specifically increasing the volume of charging points available and battery production facilitates.

Technological change

However, technological change is set to advance beyond product lines and into production practices - the responsibility of which falls onto businesses to take charge

By embracing digitalisation, through the introduction of data management technologies (AI and 3D printing to name a few), the automotive manufacturing industry could be set to experience significant growth to the value of £6.9bn every year until 2035, bringing £74million to the UK economy.

Whilst reports highlight the UK is behind on digitalisation compared to other manufacturing countries like Germany, positive developments are starting to occur. For instance, advanced robotics are starting to support human operators, where technology firms like Siemens are developing efficiency based manufacturing and product lifecycle management softwares.

However, the core issue of connecting these technology brands to the many manufactures remains a key concern.

Black and white car line up

Demand driven supply chain

By shifting their focus from traditional methods to digital technologies, brands can expect to benefit from better levels of supply chain management, aligning production with consumer demand.

This could reduce operating expenses, prevent shortages and inventory overproduction alongside increasing sales performance and data insights, providing a commercial benefit to the automotive industry.

It is evident by adapting processes to become more focussed on efficiency and consumer trends, the automotive industry could expect to benefit from increased levels of profitability. However, the willingness to invest to adapt remains a key barrier to success.

At Pitch, we have worked alongside some of the top automotive brands in the UK, both at a production and end-product level. As our dedicated Automotive consultant, Julia combines her knowledge of the market with a personable approach to deliver a tailored insights driven service, ensuring you gain true value and real insights during your recruitment journey.

 

Image Credit:

Header: Close up of gear shift by Pixabay https://www.pexels.com/photo/close-up-of-gear-shift-over-black-background-248539/

Second image: Close up of tire by Gerd Altmann https://www.pexels.com/photo/auto-black-black-and-white-car-21694/ 

Third image: Black and white car by Torsten Dettlaff https://www.pexels.com/photo/automobiles-automotives-black-and-white-black-and-white-70912/