SMMT calls for government support to secure growth

The UK automotive industry has urged government to take rapid action to secure the long-term future of one of the country’s most important assets, while accelerating its decarbonisation.

The call comes as the sector finally begins to emerge from the pandemic-induced downturn, with new analysis from the Society of Motor Manufacturers and Traders (SMMT) suggesting its return to growth could be worth an additional £14bn to the UK economy next year alone.

The new car and van market outlook anticipates 15% growth next year, worth £10bn, with further potential in 2024, delivering a cumulative £25bn win for the economy. Meanwhile, manufacturing outlook is equally promising. Easing semiconductor shortages are expected to help light vehicle output rise by 15% in the next 12 months to 984,000 units, an uplift worth some £3.9bn, and by 2025, production volumes are projected surpass a million vehicles.

To harness this growth, the sector is calling for a targeted government action plan to safeguard the future of advanced automotive manufacturing. Such a strategy should help to attract investment in vehicle, battery and fuel cell production; support electrified supply chains, skills and innovation; and deliver the incentives and infrastructure needed to drive a healthy zero emission vehicle market.

Measures should include extended support on energy costs and investment in decarbonisation, help for cash-flow constrained SMEs, business rates reform to encourage rather than penalise investment, Apprenticeship Levy reform, the creation of a national skills platform and investment to drive faster rollout of charging infrastructure.

Alison Jones, SMMT president and senior vice president global circular economy, Stellantis, said: “UK automotive is an agile sector that doesn’t just embrace change and innovation, we lead it. But we face fierce global competition and in the global race to net zero we must be as attractive – more attractive – than rival countries against whom we will compete for investment. We have inherent strengths, but to play to them, we need the right competitive framework; a level playing field. We are not asking for support to survive, but demanding action so we can thrive.”

Mike Hawes, SMMT chief executive, said: “In the most testing of times, growth finally beckons for the UK automotive industry, and as recession looms, that’s growth that should be nurtured. We need a framework that enhances competitiveness, enables investment and promotes UK automotive’s strengths: innovation, productivity and a highly skilled workforce. We therefore need swift and decisive, action that addresses the immediate challenges and gives us a fighting chance of winning the global competition. That window of opportunity is open but is closing fast.”