The UK automotive industry has urged the 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 suggesting its return to growth could be worth an additional £14 billion to the UK economy next year alone.
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% growth next year, worth £10 billion, with further potential in 2024, delivering a cumulative £25 billion win for the economy.
To harness this growth, the sector is calling for a targeted government action plan to safeguard the future of advanced automotive manufacturing and the thousands of British jobs it sustains. 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.
The automotive industry is a critical contributor to the UK economy, stimulating growth and employment, providing hundreds of thousands of high-value, highly skilled jobs in every part of the country – and supporting thousands more in sectors from steel and plastics to logistics and finance. As Europe’s current second largest market, and with home-grown vehicles shipped to almost every corner of the world, it is also a £77 billion global trading player, accounting for 10% of total UK goods exports.
But as the sector undertakes its biggest transformation in 120 years – upon which the UK’s net zero ambitions depend – it faces multiple threats. Economic instability, trade protectionism, regulatory change, a cost of living crisis, skills shortages and soaring energy costs already some 80% higher than the EU average, are all acting as a brake on its global competitiveness.4
A dedicated action plan with a package of measures to amplify Automotive’s competitiveness would help to overcome these challenges.