CEO Update

Trading on special relationships

28 September 2018 #CEO Update

While the political focus of the industry and, indeed, the SMMT has been on Brexit, future trade challenges are not confined to Europe. Across the pond, President Trump has already raised tariffs on steel and aluminium, tariffs that are costing automotive manufacturers competitiveness. There is also the threat of further sanctions against automotive imports to the world’s second biggest car market and the UK’s second biggest automotive export market.

America is a key partner. The UK exported nearly 110,000 cars to the US in the first half of the year (16% of total automotive exports), and there are numerous American OEMs and Tier 1 suppliers who use the UK as a strategic base for EMEA markets thanks to our well-developed infrastructure and technological expertise. And UK automotive brands directly support jobs in the US too.

We are keen to maintain a smooth trading relationship across the Atlantic, not just now but in the post Brexit future, with free and fair trade that enables a two-way flow of cars, components and investment. That was the message given to industry counterparts, government representatives and other stakeholders during positive meetings in Washington DC and Detroit this week as we seek to ensure the UK automotive industry is not disadvantaged by trade restraints and, moreover, is well placed to benefit from any future trade agreements.

Elsewhere, we released manufacturing figures for August this week. Much like the registration figures at the beginning of the month, the numbers mostly tell us that August is an outlier, a small but sometimes erratic month subject to seasonal shutdowns, regulatory changes and model changes. That said, cars, engines and commercial vehicles produced in the UK are all still enjoying relatively strong export figures, chiefly to the EU. Those strong numbers underline how important it is that we get a Brexit agreement that secures frictionless trade with the rest of Europe.

Deal or no deal, all of us will feel the impact on our daily business – something we will be discussing at our Midlands Regional Forum in Derby next month. Participant will hear how to get ready for Brexit, as SMMT seeks to help members plan ahead and mitigate as best they can the effects of our departure from the European Union. Speakers from Toyota, SMMT, Thyssenkrupp and more are already confirmed and tickets are free for SMMT members – register here.

Update Newsletter