Do UK Automobile Sales Depend on the EU?

Do UK Automobile Sales Depend on the EU

BMW faces challenges

Companies with operations in the United Kingdom sold US$42 billion worth of exported cars to customers around the globe. That dollar amount reflects a 9.8% improvement from the $38.2 billion in UK car exports in 2013 and a 2.9% gain from 2016 to 2017.

European Union members bought a slightly declining amount of cars exported from the UK, $17.1 billion which represents a -0.4% decrease from $17.2 billion one year earlier in 2016. Still, EU purchases of cars from Britain rose 27.8% compared to the $13.4 billion bought during 2013.

Declining at a faster pace were UK’s imports of cars from EU members, at $38.6 billion sliding -3.6% in value at $38.6 billion down from $40.1 billion during 2016.

UK Car Exports

Top 25 Countries Buying UK Car Exports

Consider the following list of major importing countries for automobiles from Britain, which collectively represent 89.9% of the value for all UK exported cars during 2017. Twelve–or just under half–of the top 25 importers of cars shipped from the UK are EU members.

EU countries are bolded among the listed top UK car buyers below.

  1. United States: US$8.6 billion (Down -0.7% since 2016)
  2. China: $5.4 billion (Up 17.1%)
  3. Germany: $3.4 billion (Up 4.5%)
  4. Belgium: $3.2 billion (Up 2.1%)
  5. Italy: $2.3 billion (Up 4%)
  6. Spain: $1.9 billion (Up 1.9%)
  7. Netherlands: $1.4 billion (Down -24.3%)
  8. Australia: $1.2 billion (Up 19.4%)
  9. France: $1.2 billion (Up 4.4%)
  10. Japan: $1.1 billion (Up 13.1%)
  11. South Korea: $912.6 million (Up 8.5%)
  12. Canada: $869.3 million (Up 20%)
  13. Russia: $699.4 million (Up 2.3%)
  14. Sweden: $685.1 million (Down -9.6%)
  15. Poland: $676.1 million (Up 60.9%)
  16. Turkey: $626.7 million (Down -18%)
  17. United Arab Emirates: $579.9 million (Down -24.9%)
  18. Switzerland: $519.7 million (Up 1.7%)
  19. Ireland: $438 million (Down -37%)
  20. Austria: $374.1 million (Up 6.1%)
  21. Saudi Arabia: $363.1 million (Up 25.3%)
  22. Denmark: $340.6 million (Up 15.4%)
  23. Norway: $306.9 million (Down -15.6%)
  24. New Zealand: $287.2 million (Up 16.3%)
  25. Portugal: $273 million (Down -6.7%)

Year over year, six of the non-EU countries above posted double-digit gains in their purchases of UK automobiles led by Saudi Arabia’s 25.3% uptick. The other top gainers from 2016 to 2017 were UK car buyers in Canada (up 20%), Australia (up 19.4%), China (up 17.1%), New Zealand (up 16.3%) and Japan (up 13.1%).

Changes in purchases of UK vehicles for the bolded EU customers fluctuated from a -37% cutback for Ireland up to a 60.9% year-over-year uptick for Poland.

UK Car Imports

Top 25 Countries Supplying UK Car Import Purchases

From the list of major suppliers of cars exported to the UK, 15 or 75% were member-countries belonging to the European Union. The EU members below represent 87.3% of the total value of the UK’s imported cars bought in 2017.

EU countries are bolded among the listed top UK car suppliers below.

  1. Germany: US$19.8 billion (Down -3.1% since 2016)
  2. Belgium: $6.9 billion (Down -4.2%)
  3. Spain: $3.9 billion (Down -14.2%)
  4. Japan: $2 billion (Down -8.4%)
  5. France: $1.7 billion (Up 4.4%)
  6. South Korea: $1.6 billion (Up 3.8%)
  7. Slovakia: $1.1 billion (Down -8.6%)
  8. Turkey: $1.1 billion (Up 27.1%)
  9. Czech Republic: $1.1 billion (Down -15.7%)
  10. Netherlands: $930.8 million (Up 136.8%)
  11. Poland: $810 million (Down -10.6%)
  12. Italy: $789.7 million (Down -16.9%)
  13. Sweden: $588.9 million (Up 40.7%)
  14. Portugal: $376.2 million (Up 27.4%)
  15. South Africa: $349 million (Up 5.8%)
  16. Hungary: $186.8 million (Down -35%)
  17. Austria: $166.4 million (Down -14.6%)
  18. Romania: $151.5 million (Up 61.5%)
  19. Morocco: $151.1 million (Up 15.1%)
  20. Mexico: $139.6 million (Down -2.5%)
  21. India: $60.9 million (Down -54%)
  22. China: $54.6 million (Up 10.6%)
  23. Thailand: $54 million (Down -25.1%)
  24. United States: $51.2 million (Up 51.9%)
  25. Slovenia: $35.8 million (Up 3.2%)

Among the bolded top EU suppliers to the UK, the Netherlands boosted its car sales to Britain by the greatest percentage up 136.8% from 2016 to 2017. Double-digit increases belong to EU countries Romania (up 61.5%), Sweden (up 40.7%) and Portugal (up 27.4%).

Year-over-year changes in the international sales of cars from top non-EU exporters to the UK range from a -54% drop for India up to a 51.9% boost for American car makers.

EU Car Makers

Largest UK Car Suppliers

Most of the largest automotive companies selling cars to the UK are owned by foreign multinationals including those with their headquarters in the EU. The following list was compiled from the Forbes Global 2000 rankings in which only two British automotive companies ranked compared to 11 from others that are EU members.

  1. Renault (France)
  2. Peugeot (France)
  3. Michelin Group (France)
  4. Valeo (France)
  5. Volkswagen Group (Germany)
  6. Daimler (Germany)
  7. BMW Group (Germany)
  8. Porsche Automobil Holding (Germany)
  9. Continental (Germany)
  10. Pirelli & C. SpA (Italy)
  11. Autoliv (Sweden)
  12. Delphi Automotive (United Kingdom)
  13. GKN (United Kingdom)

The overshadowing economic risk is that the large EU multinationals may decide to relocate car manufacturing operations outside the British Isles. That sobering prospect would have a harmful impact on the UK’s unemployment rate which stood at 4.1% as of September 2018.

Diminished automobile production capabilities would reduce British car exports. A rising unemployment rate would mean that fewer Brits could afford to buy products from car makers regardless if they were built locally, in the European Union or elsewhere.

A prolonged decline in international car sales could also trigger the next global recession.



 
The UK was slightly more dependent on the EU for its global sales in 2017, up to 40.8% from 40.1% of overall UK car exports one year earlier in 2016.

In contrast, the UK’s imports of cars made in other EU nations slipped from 89.2% of its worldwide purchases in 2016 to 87.3% in 2017.

Albeit based on an admittedly short timeframe, Britain’s international trade of cars bought and sold with the European Union may have started to dwindle.

See also Top EU Export Countries, Car Exports by Country and Car Imports by Country

Research Sources:
Forbes 2015 Global 2000 rankings, The World’s Biggest Public Companies. Accessed on December 6, 2018

The Telegraph, The Fall and Rise of Britain’s Car Industry. Accessed on December 6, 2018

Trade Map, International Trade Centre. Accessed on December 6, 2018

Trading Economics, United Kingdom Unemployment Rate. Accessed on December 6, 2018

Wikipedia, Automotive Industry in the United Kingdom. Accessed on December 6, 2018

Wikipedia, List of car manufacturers in the United Kingdom. Accessed on December 6, 2018