UK vehicle production under intense pressure, warns SMMT
The Society of Motor Manufacturers has said UK vehicle production remains under intense pressure and called for urgent government action.
Its figures revealed that vehicle production fell 7.5% in the first half of the year, although a steady second quarter performance suggested signs of recovery.
Both car output and exports grew between April and June, but the SMMT said the sector remains under pressure and has urged the government to address key issues around energy costs, trade and regulation.
CEO Mike Hawes said: “The challenge is competitiveness, and three pressures need urgent attention. First, energy costs. The British Industrial Competitiveness Scheme is welcome, but UK electricity prices are still expected to remain far above those in Europe. That makes it harder to build vehicles competitively here, so harder still to attract investment.
“Second, trade must remain open. Exports account for three quarters of our output, and the EU remains our largest closest partner. We don’t just trade together, we build together, and SMMT, ACEA and CLEPA are all united in opposing provisions in the European Commission’s ‘Made in Europe’ proposals that could effectively exclude UK made vehicles from significant segments of the European car market.
“This would hurt vehicle production and weaken shared supply chains, damaging both sectors.
“Third, regulation must reflect the market. Manufacturers have invested billions in EVs but the ZEV Mandate is still running ahead of natural demand, while charging rollout lags behind.”
Transition
Hawes continued: “The call for reform is not narrowly made: it comes from manufacturers that build and import here as well as from retail businesses, and those responsible for repairing vehicles. This is not about lowering ambition; it is about making the transition deliverable.
“These pressures are linked. High energy costs weaken competitiveness; trade barriers raise costs further; regulation that outpaces demand makes the market unprofitable and investment incredibly difficult to justify. Boardroom decisions are being made now and, if they are to go in our favour, we need competitive energy, competitive trade, and a competitive transition.”
