SMMT predicts investment slowdown
The Society of Motor Manufacturers is expecting to report that there was a slowdown in investment in the UK automotive industry in 2016.
Speaking to the Treasury Committee, chief executive Mike Hawes said that he thought research would reveal that several years of growth will have come to an end last year.
He said, ‘We are putting together the data as best we can. But I sense certainly that the amount invested over the last 12 months will not be as high as the preceding one, two, three years. Certainly, I believe that companies are at least sitting on their hands until there is a bit more clarity.
Investment in research and development was £2.3bn in 2014 and £2.5bn in 2015. Last year Nissan and Aston Martin both committed to new production in the country, but Mike Hawes said that shouldn’t be taken as representative of the entire industry.
He said, ‘It was great news that Nissan did commit there. Each individual manufacturer will be in a different position. You can’t draw too many conclusions from one manufacturer.’
David Bailey, professor of industrial strategy at Aston Business School, added, ‘The Brexit vote leaves considerable uncertainty over the nature of the UK’s trading relationship with the EU. That uncertainty has the potential to impact on foreign investment in the UK auto sector, especially when auto firms are looking to replace models.
‘Plants and jobs could be at risk if that uncertainty isn’t ‘nailed down’ as quickly in the form of clear parameters for a trade deal – and preferably one that is as close as possible to existing single market arrangements.’