Yesterday SMMT repeated its call for the UK to remain within a customs union with Europe beyond March 2019, as production news coincided with a House of Commons debate on Britain’s continued membership. As we seek to define our future relationship with the £500 billion EU economy, Parliament will be closely watched. The Commons discussion was a barometer for the mood of the House, where it is suggested that a cross-party majority for a customs union may – just – exist and it was encouraging to hear increased understanding among MPs of the complex issues facing globalised industries such as ours.
Manufacturing is especially affected by changes to customs procedures, where any delay stands to jeopardise lean and ‘just in time’ processes. Adverse weather was a factor for some manufacturers last month, holding up both parts and factory staff, and contributing to the lower number of units produced in the month. However, data for 2018’s first quarter has revealed a decline of more than 13% for cars, as well as a 10.8 percentage-point drop for commercial vehicles.
Double-digit falls for car production occurred across both domestic and overseas markets, cause for concern given the export-led nature of our industry. The UK market, as we know, has faced challenges – not least the confusion around diesel, which has caused diesel customers to sit on their hands, while demand in other European markets has also slumped. This can be addressed with clear communication and endorsement by policy makers, but the long term relationship with our biggest market – and the maintenance of free and frictionless trade – will be key to our future growth. We were pleased to hear parliamentarians in both chambers over the last fortnight echo our comments that any increase in the time and cost of importing and exporting will simply make the UK worse off.
More evidence of the importance of automotive to the British economy and jobs was also on show at the Commercial Vehicle Show in Birmingham this week. An SMMT survey to mark the event revealed almost nine in 10 consumers believe restrictions to CV-driven services would have a negative impact on their life, and almost half had benefited from one in the past 24 hours. With 5 million goods and service vehicles on our roads, CVs are truly the backbone of our economy. And while we didn’t send them a survey, I suspect the 21,000 visitors registered to attend the Show would agree.
Mike Hawes, SMMT Chief Executive
