The Society of Motor Manufacturers and Traders (SMMT) has urged the government to act swiftly in order to secure the long-term future of the automotive sector. The SMMT considers automotive to be one of the country’s most important assets.
Return to Growth
The timing of the push comes as the sector begins its recovery from a period of downturn post pandemic. New analysis from the SMMT suggests a return to growth could be worth an additional £14bn to the UK economy in 2023 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 SMMT said. The new car and van market is expected to grow by 15% next year, worth £10bn, with further potential in 2024, delivering a cumulative £25bn win for the economy.
The manufacturing outlook is equally promising with easing semiconductor shortages expected to help factory output rise by 15% in the next 12 months to 984,000 units, an uplift worth some £3.9bn.
The sector is calling for government to formulate a targeted action plan to safeguard the future of advanced automotive manufacturing and the many thousands of British jobs involved. As the sector faces a major transformational period linked to the UK’s net zero ambitions, there are a number of threats to consider.
Dedicated Measures to Assist
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 contributing to reduce global competitiveness, the SMMT suggested. A dedicated package of measures to amplify automotive’s competitive edge would greatly assist with handling these challenges, the SMMT said.
It’s suggested that measures should include extended support on energy costs, help for cash-flow constrained SMEs, business rate 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.
In a statement, Mike Hawes, SMMT chief executive, said: “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,” he concluded.