The industry’s competing challenges were played out this week: Brexit, a putative trade war and demands to make the UK fit for an electrified future. First, the good news, which came in the form of a production boost across UK automotive manufacturing. After five months of negative growth in car production, output grew by 5.2% in April, alongside double-digit increases in commercial vehicle and engine manufacturing.
Ostensibly, this is a positive development but it should, as with any monthly variation, be treated cautiously. Remember, last April saw an 18.2% decline in car manufacturing when Easter bank holidays and fallout from the VED pull-forward conspired to slow production. So the numbers were always likely to go up this year.
So what does it tell us? Namely that as hard as our industry works to produce some of the world’s most desirable products and as agile as it is in reacting to changing demands, it is exposed to external influences beyond its control. US-EU trade tensions are clearly concerning, given the importance of our cross-Atlantic trade and the benefits gradual elimination of tariffs and other barriers would deliver to both our economies. Closer to home, Brexit continues to loom large. It is the new models we’ve seen hit production lines in the last 12 months that are driving growth, highlighting the critical need for a deal that will safeguard our ability to attract future investment in what is already an intensely competitive environment.
At the same time, industry faces the challenge of growing the still emerging zero emission vehicle sector. Manufacturers are investing heavily in electrification and other technologies but they also need a supportive market, so government’s extension of the plug-in car and van grant until the autumn is encouraging. Continued long-term incentives for ULEVs and ZEVs across all technologies and a stable and predictable taxation structure will be critical to boosting uptake in this critical phase.
On Wednesday, we were also pleased to attend the first meeting of a new TfL Taskforce bringing together industry, business and the public sector to design a user-friendly recharging network that should provide a template for other cities in the UK and throughout Europe. Such collaboration will be integral to boosting consumer confidence in EVs and to supporting the billions already invested by industry.
The theme of sustainable mobility continued on Thursday at the Hay Festival, where SMMT joined a Go Ultra Low panel alongside Transport Secretary Jesse Norman, Hyundai UK and Octopus Electric Vehicles to discuss the need for government policy to reflect the realistic pace of technological advancement and market development.
Collaboration will also be a central topic at SMMT’s Open Forum, taking place at Automechanika Birmingham next week. The event will explore how manufacturers, technology innovators and suppliers can work together to lead the mobility revolution and seize opportunities from CAVs, artificial intelligence and digital manufacturing. I look forward to seeing you there.
Mike Hawes, Chief Executive, SMMT