Servicing the Car Makers

Our motor vehicle industry appears to be in a fragile state, rarely a day goes by without one manufacturer or another locked in talks with the government about loan guarantee schemes or other emergency measures designed to prop up production in a sector hit by falling sales and the challenge of an industry with huge global capacity. The Society of Motor Manufacturers and Traders estimate that nigh on 800,000 people are employed in the motor vehicle industry in the UK. But how many of them have jobs on the production line itself, physically assembling the vehicles? The answer is smaller than you might think.

The Independent carried an excellent business analysis piece a few days ago which looked inside the employment statistics for the UK motor sector.

“The myth is that carmakers are major manufacturers - the fact is the motor sector is a service industry: far more people sell and service cars than make them. Ford employs 13,000 people making engines and vehicles – but 22,000 in its dealerships. Vauxhall, the UK subsidiary of the troubled General Motors, employs 5,500 people producing Astras at Ellesmere Port and vans at Luton; it supports another 7,000 people at supplier companies, but there are 23,000 jobs at dealers.”

In total less than 300,000 are employed manufacturing the vehicles and their components - the bulk are in motor trade services.

The Motor Industry in Snapshot

There are 27 vehicle manufacturers in the UK
There are also more than 2,000 companies making components such as windscreens and tyres
The UK motor industry is almost entirely owned by foreign firms, and its plants are competitive both in terms of productivity and labour cost.
19 of the world’s 20 top parts suppliers have UK factories
UK demand for cars is expected to fall to 1.72 million this year
New car sales in Britain fell last month to their lowest April level for 18 years
The scrappage incentive scheme is due to be introduced on May 18
Car sales in China in January 2009 overtook the US to become the world’s biggest automotive market
The UK industry is deeply connected to global trade - four-fifths of cars sold in Britain are made abroad, three-quarters of UK production is sold overseas
British businesses build 3 million engines a year - far exceeding the number of cars produced or purchased

See also

Does Britain still need a motor car industry (Manufacturer.com)

World’s carmakers racing to form alliances (LA Times)