British car production is likely to enjoy an export-driven boost in 2012, as competitiveness due to a weak currency helps outweigh tough market conditions in its key overseas markets and stagnant demand at home.
Car output rose 5.8 percent to 1.34 million units last year -- the highest since 2008 -- with a record 84 percent of that shipped abroad, Britain's main auto industry lobby said on Thursday.
Major companies with big British manufacturing bases include Honda, Tata Motors -- which owns the Jaguar and Land Rover brands -- Mini owner BMW, Nissan, Toyota and General Motors unit Vauxhall.
We haven't got a specific forecast but we are expecting further improvement during 2012, Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders, told Reuters after the trade body released 2011 production figures.
Solid car exports will continue to drive output growth, he added, noting demand was strong in China, Russia, the Middle East and the United States, helped by sterling's weakness.
Our biggest single market remains Europe, and whilst there is a clear concern about stability within the euro zone, the big advantage is the exchange rate means that UK-produced vehicles remain extremely competitive even in markets which are perhaps weaker than we would like, Everitt said.
The debt crisis in the euro zone is pushing Britain's economy closer to recession.
Car makers have been among the few bright spots in an overall sluggish recovery, and the government is pinning its hopes on a manufacturing revival as it tries to move away from an over-reliance on financial services.
British car exports rose 17 percent to 1.12 million units in 2011, and this year are expected to grow in line with output, keeping their share of all production around the current record level, an SMMT spokesman said.
Some 60 percent of all British-made cars went to the euro zone last year, down from 63 percent in 2010 and 70 percent in 2009, he added. Germany and Italy are the biggest buyers in the region, taking 88,000 and 75,000 cars respectively.
Growing demand from abroad is likely to compensate for flatlining car sales in Britain.
Sales of new cars -- almost 90 percent of which are imported -- fell 4.4 percent last year to 1.94 million units, and are likely to be broadly flat this year, the spokesman said.
At 1.34 million units, British car output remains below the average 1.5 million seen in the decade before the 2008-2009 recession.
However, SMMT hopes that some 4 billion pounds ($6.19 billion) of investment in Britain's automotive industry and its supply chain announced last year will help boost production in 2012.
(Editing by David Hulmes)