CEO Update

UK Automotive’s huge economic contribution is under threat

07 June 2019 #CEO Update

We enjoyed a period of huge success in the years following the global financial crisis, but yesterday’s announcement by Ford that it proposes to close its Bridgend plant is another crushing blow for UK automotive manufacturing and, especially, the staff and their families in the area.

The challenges facing the company are not unique – economic uncertainty at home and abroad, technological changes and global trade issues are stressing markets and forcing companies to review operations and make difficult decisions.

We need certainty and stability for growth and while the UK cannot determine global issues, it can help create the right conditions for competitiveness at home. Brexit is not the only factor and is not necessarily the cause of the negative announcements in recent months but it would equally be wrong to dismiss it. It remains the clear and present danger to the UK automotive sector. Continued discussion in Westminster circles about a ‘no deal’ Brexit in October – something we’ve always said would be catastrophic – compounds what is already a tough global market outlook.

The fundamentals of the British car industry are strong – high-tech plants, established infrastructure, a talented workforce and some of the best minds in the world focused on developing next-generation technologies. The priority now should be restoring confidence, boosting demand and ensuring long-term competitiveness for what is a crucial sector. This is the point that we will make to any future prime minister.

To help bolster the industry, SMMT has been at the NEC for Automechanika Birmingham this week, an event we’ve helped create and support since its inception four years ago. Having a trade show like it in the UK is more important than ever, giving companies a platform from which to present themselves to domestic and international audiences alike.

We host a range of activities around Automechanika, including Open Forum, our supply chain-led conference which this year focused on the challenges and support arising from the electrification of vehicles, as well as our Meet the Buyer sessions which link up purchasing departments and suppliers. The show now moves to a biannual format, returning in 2021.

Finally, we also published registrations data for May this week, with the market still depressed amid political and economic uncertainty. Business and consumer confidence, while improving marginally, is creating tough market conditions with people hanging on to their older, more polluting cars instead of upgrading to the latest, cleaner petrol, diesel or alternatively fuelled vehicles. We need to reverse this decline for the betterment not just of the environment but also the wider industry and economy.