Two trade deals in one week
As the UK commemorated the 80th anniversary of VE Day last week, it was apt that the country also forged closer ties with two long-standing partners, the US and India. In turbulent times, and given the export-led nature of the UK sector, stable trade relationships are a pre-requisite for the industry to succeed globally. The US is our second most important market for car exports, so an agreement to reduce tariffs is great news for consumers and the industry, providing much needed relief and paving the way to greater opportunities for mutual growth.
Government has worked quickly and tirelessly with US counterparts, and immense efforts have also gone into securing this week’s landmark deal with India, the result of three years of complex negotiations. While it likely features some compromises, the agreement is a historic step towards strengthening already close British and Indian ties in automotive trade and investment.
Opening up overseas markets helps drive economic growth in the UK, as does a vibrant domestic market. While the latest SMMT figures show disappointing levels of UK demand in the new car market in April, it isn’t surprising after a particularly strong March, fewer working days over Easter and VED changes affecting all new cars, including the punitive Expensive Car Supplement on EVs.
Rising electric car and van registrations comes thanks to unmatched industry innovation and investment, but demand is still below ambition, despite being unsustainably subsidised by manufacturers. Fiscal incentives – and removal of disincentives – remain essential measures, along with nationally accessible and affordable public charging so that motorists can switch regardless of their budget or location.
Growth in new EV volumes on UK roads also brings greater availability in the second-hand market, where most people buy their next car and, indeed, SMMT figures published this week show the used car market enjoyed its strongest first quarter since 2019, thanks to recovering new car demand. Ever more used buyers are opting for EVs too amid better choice and affordability – evidence that increasing EV volumes, not percentages, is the key to unlocking a thriving future of mobility for all.