SMMT unveils Driving Long-Term UK Automotive Growth report
The Society of Motor Manufacturers and Traders has published a new report outlining a new strategy to secure the future success of the UK automotive industry.
The Competitive Edge: Driving Long-Term UK Automotive Growth report set out 10 steps to return the UK to the top 15 global automotive manufacturing locations by 2030.
However, the report also highlights the severe challenges facing the sector.
Its inaugural UK Automotive Business Leaders Barometer has revealed low confidence in global trading conditions and doubts about the ability to meet net zero ambitions, with 73.5% of the CEOs surveyed saying their business costs had increased in the last year and 46.9% reporting falling profits.
Regulations
Meanwhile, the sector also faces some of the world’s toughest market regulation and compliance costs – factors which must be addressed urgently to create a level playing field to attract investment and generate further growth.
The report also found that UK automotive manufacturers pay more for electricity than anywhere else in Europe – more than double the average – with energy taxes up to six times higher.
Net zero targets are also straining the industry, with manufacturers incurring a £6.5bn electric vehicle incentives bill over the last 18 months to drive waning consumer demand. Despite this, 52% of CEOs believe the UK is significantly behind track to meet the 2030 end of sale date for new petrol and diesel cars.
Next steps
To address these challenges, the Competitive Edge: Driving Long-Term UK Automotive Growth report has set 10 recommendations:
- Introduce transformative new support to supercharge the market, including a major purchase incentive scheme for consumers for the duration of the mandate, and maintenance and extension of support for harder to decarbonise segments.
- Publish a clear roadmap for bus, coach and heavy-duty vehicle decarbonisation co-developed with industry.
- Ensure everyone has a ‘right to charge’ by mandating delivery of public charging and refuelling infrastructure across the UK.
- Ensure the UK’s competitiveness prospectus and role of the Office for Investment to promote the UK’s offer is geared to support new and existing investors.
- Reduce the cost of energy and support manufacturers to remain internationally competitive.
- Provide step-change supply chain funding to de-risk private investment into competitiveness building activities.
- Follow through on the promise to allow 50% of the apprenticeship levy to be spent on non-apprentice training.
- Maximise and develop the EU-UK economic relationship to protect and grow the European automotive sector.
- Deliver on the foundations of the UK-US Economic Prosperity Deal to maximise automotive exports.
- Secure trade agreements with new and existing trading partners which place automotive at their core.
Industrial strategy
Mike Hawes, SMMT chief executive, said: “We welcome the government’s industrial strategy, a 10-year plan which answers our call for a long-term commitment to automotive manufacturing. With action to reduce electricity costs, upskill workers and unlock finance, it lays the foundation on which we can build our future.
“We now need to see the strategy implemented and at pace, because competitors will move fast so our window of opportunity will not remain open for long. The prize, however, in terms of jobs, innovation and economic growth – green growth at that – is worth the investment.”
