At the beginning of any new year it’s always nice to take stock of the year that has just passed and look forward to the year ahead. It’s fair to say 2019 was a mixed year for the UK car industry and beyond. Many factors impacted the industry this year and there has been much for manufacturers and the wider supply chain to deal with. Here we take a view of the big issues impacting the industry this year and look ahead to what we can expect for 2020.
Brexit, and more importantly the uncertainty surrounding Brexit has undoubtedly had one of the biggest impacts on the car industry this year. With manufacturers having to invest significantly in contingency plans, both in terms of time and budget. Additionally, uncertainty surrounding Brexit was also felt directly in car sales, with UK figures down 2.7% at the end of November compared to the same time last year.
This uncertainty remains of course and the likelihood of further ramifications from manufactures not knowing how trade will work moving forward are likely to last well into 2020.
Brexit is not the only reason car sales were down overall this year. One of the other huge factors effecting manufacturing was the news of the potential introduction of anti-diesel legislation. Sales of diesels fell more than 22% year on year in the UK – hitting firms with a heavy reliance on those engines, such as Jaguar Land Rover (JLR),the hardest.
In addition to the push to reduce the use of diesel vehicles, tougher emissions tests that were introduced at the end of 2018 continued into this year and also had a big impact on many manufacturers with some having to temporarily pull models from production.
The ongoing preparation for the EU’s 2020 CO2 emissions targets also still looms large in the collective minds of manufacturers and has led to a huge rise in hybrid vehicles as full electrification is still very much a work-in progress. Potentially huge fines for any manufacturers that do not meet these targets are still very much a possibility and will have the knock-on effect of disruption in the availability of some marques and models as CO2 emissions figures are tackled.
Electrification and autonomous vehicles
Electrification and the global race for connected and autonomous vehicle (CAV) adoption continues to impact the UK industry. Government targets and the public conscience means the demand for such vehicles continues to grow. With this in mind, the battle to deliver on these demands is likely to continue into 2020. For manufacturers, this means massive changes in the way they work, who they work with and the skills they need to employ to get to the point where this investment is returned in real life car sales. We’ve discussed electrification more in our previous blog here and we’ve looked further into CAVs here.
So, what’s next?
All of the above are likely to continue to impact the UK car industry well into the new year. With Brexit at least we will have more certainty on the county’s position come January 31st, although this is likely to be minimal and the real term impact of our exit from the EU will take months if not years to materialise.
The ramifications of ongoing pressure from the government and the consumer for the car industry to operate in a cleaner, more environmentally friendly way are being seen now but there is a long way to go before the industry catches up and we see mass-scale electrification in action.
Add into this, emerging technologies which are still very much in their infancy and its clear to see the UK and, in fact global car industry has much to contend with in the coming years. Having said that, there has potentially not in recent years been such an exciting time for the industry and there are plenty of opportunities for this change to become a positive for manufacturers, the wider supply chain and the consumer. What will be interesting to see is who will seize the opportunities and succeed in this climate of change and who will fair less well.
2020 is due to be very interesting indeed, there is no argument there.