Market Insight: UK, US slide as India booms

ONCE a major car-making nation, Britain is sliding quickly as a major world automotive centre as the cost of production and a bit of politics determines that factories become sited in high-density locations with low labour costs.

Britain now supplies less than one-third of the vehicles to the Australian market compared with six years ago, down to about 10,000 estimated for calendar year 2022 compared with 35,581 in 2016.

The pandemic’s effect on production has not helped but there have been bigger issues at play not the least is the closure in July last year of Honda’s manufacturing plants in the UK.

Honda first opened its UK factory in Swindon in 1985, a year after Nissan opened up its factory in Sunderland and four years before Toyota started production in Burnaston, Derbyshire, as the Japanese looked to the UK as a springboard for European sales.

The Honda closure took away Australian access in 2019 of the Civic Type R. The other models previously made for Australia in the UK – including the Civic and CR-V – before the switch to Thailand and more recently, the HR-V and Civic being sourced from Japan.

Nissan has been the UK’s biggest manufacturer by volume since 1998. It supplies Australia with the Juke, Leaf and Qashqai (about to be replace by a new-generation model), accounting for 899 units in the five months of 2022 and 8479 in total for the 2021 calendar year.

To show the importance of Nissan, the volume of its models coming from the UK represented almost 47 per cent of all Australian imports from that country in 2021.

As some manufacturing moves from the UK to Thailand and Japan (in Honda’s case), so Britain’s role diminishes. In the same way, the popularity of the Jeep Compass – Jeep’s second most-popular model in Australia – is moving the production bias from Jeep’s predominant US manufacturing base.

The Compass is made at Jeep’s plant near Pune in India, and to the end of May this year, accounts for 667 sales. In 2021, Jeep sold 1363 Indian-made Compass units, up from 771 in 2020, for 18 per cent of Jeep’s total sales.

India as an exporter of vehicles for the Australian market has slowly lifted its presence. It has made cars for this market before but the major players have been Hyundai with its i20 (which ceased importation from India in 2015), and Ford with the EcoSport SUV that was built for Australia from 2017 until being withdrawn in 2020. 

In 2016, India made 4803 vehicles for Australian buyers and this calendar year, based on its year-to-date data to the end of May, is expected to find 8760 buyers – a rise of 45 per cent in six years.

Jeep’s non-US base has been partially responsible for the total US-sourced cars falling from almost 41,300 in 2019 to just under 35,000 in 2021 and to an estimated 33,000 in this current calendar year.

In its total, the US supplied 52,513 vehicles in 2016, so it has reduced in volume by 38 per cent in the six years to 2022 as global production was hit by pandemic-driven labour reductions, shipping issues and semiconductor shortages.