CEO Update

A global outlook is the best thing for UK Automotive

13 September 2019 #CEO Update

SMMT was at the Frankfurt motor show this week, a valuable chance to meet up with colleagues from across the world and see the latest launches. The overarching theme of this year’s event was very much to do with zero emission cars coming to market, and there are some exciting models on the way. Other reveals demonstrated the breadth and depth of Great British design and engineering capability which remains world class and, judging by the media coverage, punches well above its weight.

The underlying threat, however, is the UK’s potential ‘no deal’ exit from the European Union on 31 October, which would have an impact across the automotive industry around the world. The UK remains an attractive destination in which to build and export vehicles but many of the advantages the country currently enjoys would be wiped out by a cliff-edge Brexit.

SMMT continues to engage with government and make the case on behalf of its members, pressing the need for a Brexit deal that maintains free and frictionless trade with our biggest trading partner, the European Union.

We are also continuing to promote UK Automotive around the world – this week we were at the Battery Show in Novi, Michigan with nine SMMT member companies, partnering with the Advanced Propulsion Centre to host the UK stand, and we have member trips planned to Poland and Shanghai in the next few months.

We must recognise, however, that Brexit will ultimately change the nature of our relationship with many global markets. If we are to be successful in this intensely competitive environment then it is important we trade across the globe as well as maintaining close relationships with markets closer to home.

This is why we also signed a memorandum of understanding with our Korean counterparts at KAMA while in Frankfurt this week. Korea is one of the largest new car markets in Asia, with more than 1.5 million new cars registered last year, and a key export location for UK-made premium, luxury and sport cars, currently ranking 13th out of some 160 overseas destinations.

The agreement will allow us build business links, exchange information on technological trends and have local insight into any regulatory or market changes. In signing the MoU, the KAMA president made clear he would seek to help SMMT members should they face any unwarranted difficulties.

This agreement shows how the UK automotive sector is outward looking and, despite multiple headwinds, keen to work worldwide to help secure future success. The automotive industry is going through a period of unprecedented change with the shift to electrification, digitalisation of manufacturing and the development of connected and autonomous vehicles all happening simultaneously. These are global trends and our outlook must be global accepting that our biggest market is, and will remain, the rest of Europe.