UK car industry pleads for government action to secure future

Brexit and Covid hit sector hard in recent years

Production of the Nissan Leaf, an electric vehicle, at the plant in Sunderland (Supplied)

The British car industry is warning government that “rapid action” is needed to secure the long term future of what is still a major part of the economy, and a major employer and exporter.

The industry has had to contend with the demands of Brexit and the pandemic in recent years, as well as the war in Ukraine and its knock-on economic impact on disposable incomes.

Lately, the severe shortage of semi-conductors from China and Taiwan, which has stymied recoveries in production levels, has begun to ease, and sales and revenues have picked up.

However, the industry now faces fresh challenges. Demanding deadlines for the conversion of petrol and diesel engine and vehicle production are looming; as are tighter rules on what counts as a tariff-free “British” vehicle or component export to the European Union.

Without some official assistance to modernise and adapt, the successful vehicle and component industry of today will be in jeopardy.

The recent near-collapse of a Newport semi-conductor plant and the future of battery “gigafactories” are a particular focus for concern – Britain is short of note.

Manufacturers including Nissan, Ford, Jaguar Land Rover and Stellantis (owner of Vauxhall) have ambitious plans for electrification in their UK operations, but competition for investment from other European centres remains intense.

Overall the Society of Motor Manufacturers and Traders (SMMT) is suggesting the industry’s return to growth could be worth an additional £14bn to the UK economy next year alone, but it is endangered, and with it much of the UK’s contribution to, and benefits from, the net zero agenda.

Mike Hawes, SMMT Chief Executive, said: “As recession looms, 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.”

Following five years of Brexit uncertainty, two years of lockdowns, and crippling global supply chain shortages, the sector’s recovery is expected to gain momentum in 2023.

The new car and van market outlook anticipates 15 per cent growth next year.