motor industry. Manufacturing in Britain began during the 1890s in small workshops often in association with bicycle production. Business grew rapidly so that by 1913 British firms produced annually 34,000 vehicles. Rolls at the top end of the market and Morris at the other were already established. Specialist firms supplied many components for vehicle-building, including batteries, castings and sparking plugs, upholstery, tyres for wheels, and glass for windscreens and windows.

During the 1914–18 war technological developments made possible supplies of powerful and more reliable vehicles. After the war motor vehicles took an ever-growing share of road transport. The first mass-production car-builder in Britain was Ford's, which initially assembled imported kits from the USA. However the company soon found it advantageous to manufacture in Britain cars, vans, and lorries specially designed for the British market. Assembly-line methods for quantity production were adopted in the late 1920s by Herbert Austin and later by other British companies. During the 1930s the motor industry became the leading source of growth in the economy. In 1939 the world war gave additional impetus by the demand for military transport and fighting vehicles (including aircraft) and agricultural tractors.

Between 1945 and 1955 motor manufacturing had a pivotal role in the British economy. For example, by 1950 it contributed to the balance of trade by exporting 52 per cent of output. This position of world leader was lost to overseas competitors whose investment was matched by attention to design, quality, and sales and marketing skills. Simultaneously the British industry suffered from managerial and labour relations problems; over-manning was accompanied by inadequate attention to delivery at home and abroad.

The British-owned motor industry responded to its difficulties with a variety of strategies. Mergers and amalgamations created the British Motor Corporation, formerly Austin and Morris (Nuffield) in 1952, but its organizational difficulties had not been resolved fully when the company merged with Leyland in 1968. Leyland itself evolved from being a commercial vehicle producer by mergers with Standard Triumph and Rover. The Rootes group suffered difficulties and was acquired by the American Chrysler company in 1967 but subsequently it joined Talbot, a part of the French Peugeot group. Competition from German and Japanese companies in home and overseas markets was increasing. Managerial and investment problems precipitated the nationalization of British Leyland in 1977. It was privatized, and renamed Rover after its sale to British Aerospace. During the 1980s the motor industry was characterized by investments by overseas companies. By 1994 mass-production car-makers in Britain included BMW-Rover, Ford, General Motors, Honda, Nissan, Peugeot, and Toyota.

The few firms remaining in British ownership specialize in high-performance or quality cars, for example, Aston Martin and Morgan. Rolls-Royce, for nearly a century the flagship of the British motor industry, was taken over by Volkswagen of Germany in 1998.

Ian John Ernest Keil