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February 25, 2018
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India-made cars in demand in the U.K.Britain’s car imports from India continued to outpace exports in 2017; over 34,000 new cars registered

British demand for India-made cars rose last year, while demand in India for cars made in the U.K. fell sharply during the same period as British carmakers shifted more assembly operations to India.

British demand for India-made cars has long outpaced exports to India, and 2017 was no exception as more than 34,000 new cars from India were registered in the U.K., according to the figures published on Wednesday by industry body, the SMMT.

Sales of British-made cars in India plummeted by 66% to 1,144 vehicles.

While exports to Asia grew strongly (exceeding 10%), car production in the U.K. fell 3% in 2017 — the first decline in eight years, largely driven by a fall in domestic demand. The SMMT attributed the fall to ongoing Brexit uncertainty and concerns around the government’s future policy on diesel vehicles, following plans to ban the sale of cars with conventional combustion engines by 2040.Describing the fall as “disappointing”, SMMT CEO Mike Hawes said that while engagement with government had been positive, a lack of clarity around Brexit and the political and economic impact was affecting buying patterns as well as confusion around government policies on diesel cars.

Earlier this week, a leaked government report highlighted the car industry as one likely to be adversely affected by Brexit, particularly if Britain left the single market without a comprehensive free trade deal with Europe.

Europe continues to account for the biggest chunk of the auto export market (about 54% last year), while £9 billion of the more than £11 billion worth of components imported by Britain last year came from Europe.

‘Benefits must continue’

“It’s important to maintain the benefits we currently enjoy,” said Mr. Hawes, adding that it was equally important that Britain maintained access to the beneficial trading relations that the EU had established with countries across the world.

“We believe the U.K. government understands the automotive position and what we need to try and negotiate with the individual issues,” he said, pointing to the sector deal struck earlier this month, which he said highlighted the support and understanding within government.

Earlier this month, JLR said that it would be temporarily cutting production at its Halewood plant following a review, citing Brexit and the diesel concerns. The SMMT expects British car production overall to continue to fall in 2017.

Automotive investment has also fallen sharply, down to just more than £1 billion last year, from a past average of £2.5 billion. “A lot of businesses are waiting to see what the future relationship will be with the biggest market…they need clarity,” Mr. Hawes said.