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UK auto industry booming

Editorial
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The UK car making industry has received more than £450m ($818m) worth of foreign investment for 80 projects in the past year.

However, as The Financial Times reports, smaller British car component makers are missing out on the boom, with only a third of the components that go into the average UK-built car being made locally.

The large increase in foreign investment in the industry follows efforts by Automotive Investment Organisation (AIO) which undertook a promotionally trip to drum up foreign investment.

The foreign investment that has resulted has not only initiated 80 automotive projects, but also created 5,600 jobs in the sector.

80 per cent of British-made cars are exported and those export earnings have doubled to £25bn ($45b) over the past decade. However, because so many of their components are made overseas the economic benefit of the exports is somewhat reduced.

The AIO is making efforts to address the plight of British component makers. For example, it has secured a £59m ($107b) investment from Canadian automotive manufacturer Multimatic for a research and development centre in Britain.

There has been much good news for UK manufacturing of late. The overall UK manufacturing sector is growing at its fastest rate for three years, according to official figures.

The result is seen as evidence that the British economic recovery is broadening.

"Britain's factories are booming, enjoying their best spell of growth for four years," Chris Williamson, chief economist at Markit told the Guardian.

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