SMMT Update – UK-EU summit must secure automotive’s future
This week’s confirmation that the long-awaited UK-EU summit will take place on 20 November is significant. For automotive, it is a timely opportunity to strengthen a relationship on which growth, jobs and competitiveness depend. Despite Brexit, the UK and EU remain each other’s largest automotive trading partners, underpinned by deeply integrated manufacturing operations and supply chains that create value on both sides.
Recent Oxford Economics analysis for SMMT shows UK automotive production supports €24bn of economic activity and 250,000 jobs across the EU – figures that demonstrate the scale of shared interest in preserving our automotive trading relationship. Preferential partner status for the UK under the EU’s proposed ‘Made in Europe’ framework is therefore vital, while both sides must also work quickly to avert the introduction of rules of origin tariffs on cross-Channel trade in electrified vehicles on 1 January.
This week’s Paris Motor Show provided the opportunity to champion the UK as a market and manufacturing partner, with SMMT meeting policymakers, industry, stakeholders and media. The event also demonstrated the extraordinary scale of global investment in new products, from smaller mass market electric cars to premium and performance models. The prize from building these vehicles in Britain and across Europe is substantial, but squandering decades of hard-won UK-EU automotive success through restrictive trade policies would only be counterproductive.
The case for fair and open trade extends well beyond the new car market to vans, trucks and buses. SMMT figures published this week show the UK’s heavy vehicle markets are beginning to recover, with HGV and bus registrations up 7.2% and 3.1% respectively in the third quarter. Businesses are investing in the latest technologies to improve efficiency, reduce operating costs and cut emissions, replacing older vehicles with cleaner and more productive alternatives.
HGV demand nevertheless remains fragile after two years of overall decline, while zero emission uptake remains limited – at around one in 90 new vehicle registrations – despite manufacturers offering a substantial and highly capable ZEV product range. Government funding such as the Plug-in Truck Grant, Depot Charging Scheme and ZEHID programme are supporting uptake but the sector still faces long-term infrastructure and cost challenges. A technology-neutral approach to HGV CO2 regulation is needed to enable operators to invest with confidence and cut emissions sooner.
The bus sector, meanwhile, shows what can be achieved when investment and incentives are aligned. Zero emission buses now account for almost a third of new registrations, supported by government funding such as the Zero Emission Bus Regional Area and Scottish Zero Emission Bus schemes. Britain is leading Europe’s transition to zero emission buses but maintaining momentum will require a dedicated plan for smaller and rural operators, delivering the benefits of zero emission mobility across the country.