That’s the view of KPMG and its head of automotive, John Leech, who says as that as manufacturing figures have risen by 5.4 per cent to hit 1,286,286 in the first 11 months, the industry is heading in the right direction.
‘2013 has been fantastic for the automotive industry,’ said Leech. ‘The latest UK car manufacturing figures highlighted that 1,286,287 cars were produced in the first 11 months, with sales also up by 9.9 per cent. The current sales and production run rates are back at pre-recession levels last seen in 2008.’
‘UK car sales will grow in 2014 but at a slower rate than in 2013 as we are almost back to our natural long-run average. The rate of growth depends principally on when the car manufacturers pull back on the cheap credit that is currently pump-priming the market.
‘If this cheap credit remains available throughout next year then there is an increasing risk of oversupply of new cars, which could raise anxiety regarding a potential shock fall in used car residual values.
‘UK car production will grow again for the fifth year running as European car sales start to slowly rise once more. This should also see European car production finally turnaround and grow in 2014 for the first time in seven years.’
According to KPMG’s Global Automotive Executive Survey, consumer demand for electric cars failed to expand in 2013. The company predicts the market will improve in 2014 as more range-extended battery-powered come to the market.
Leech added: ‘The focus on innovation by the UK government will also help the development of driverless and electric cars. Plans to test driverless cars in the UK by global car manufacturers will push the UK as a player in driverless car technology.’