​Car manufacturing propping up Britain's economy, says industry boss

Updated: 

A motor industry chief has said that Britain's automotive sector is playing a big part in shoring up the country's economy.

Tim Abbott, president of the Society of Motor Manufacturers and Traders (SMMT), also said that the car market in the UK is predicted to experience a record year in 2014 in his speech to the organisation's annual dinner.
"The latest SMMT forecasts suggest 2014 will see a continuation of the recovery. We expect modest growth in both registrations and manufacturing as the big investments and model cycles crank up the pace," he told the assembled guests.

"Yet who would have predicted such a short time ago that tonight our industry would be celebrating significant growth, investment and global success.

"It is helping create thousands of new jobs, safeguarding many more and re-balancing the UK economy. Because when the UK automotive sector does well, the UK economy does well."

He added that September was the industry's best month for five years, noting increased footfall and a "cautious optimism" among buyers, and that that rising confidence could help to bring "billions of pounds' worth of opportunities" to UK suppliers down the line.

However, Mr Abbott also added that the European market remained a cause for concern.

"Europe provides a salutary reminder of the challenge," he said. "The EU market remains depressed with car sales down five per cent this year.

"Inevitably, this will impact on production levels here but we are hopeful that some signs of recovery are slowly emerging."

It's thought that refunds on Payment Protection Insurance are helping to drive the resurgence in the industry.

Last month, SMMT spokesperson Keith Lewis said: "People have been getting an average of £3,000 back from PPI claims, which isn't enough to pay off the mortgage or replace the kitchen but it is enough for a deposit on a new car.

"We think there is still a year to go of PPI repayments and it is really boosting the market."