3:17 pm, November 30, 2022
The car industry has called on the government to secure its long-term future, with new analysis showing the sector could be worth an additional £14bn to the economy.
The automotive industry’s recovery is expected to gain momentum next year, the Society of Motor Manufacturers and Traders (SMMT) said, and now the sector is urging the government for an urgent action plan to ensure competitiveness, attract investment and drive skills, innovation and long-term growth.
The SMMT expects the new car and van market outlook to grown by 15 per cent growth next year, worth £10bn, with further potential in 2024, delivering a cumulative £25bn win for the economy.
Easing semiconductor shortages are expected to help light vehicle output rise by 15 per cent in the next 12 months to 984,000 units, an uplift worth some £3.9bn. By 2025, production volumes are projected surpass a million vehicles.
The SMMT said the action plan 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.
The measures being called for 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.
The SMMT said the timeframe to act is closing, however, with 2024 being a looming milestone – with EU-UK Rules of Origin getting tougher and threatening tariff-free trade of these in-demand vehicles, the UK government’s Zero Emission Vehicle (ZEV) Mandate kicking in, and gigafactories coming online abroad but not yet in the UK.
The SMMT made the call at its Annual Dinner yesterday (Nov 29).
SMMT president and Stellantis’s senior vice president global circular economy, Alison Jones, 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, added: ‘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.’
