Production figures for May, released today by SMMT, continue to show the devastating effect that the Covid-19 pandemic is having on the automotive industry. UK car manufacturing output fell -95.4% last month, with just 5,314 cars produced, as social distancing requirements and reduced demand both at home and overseas continued to hinder output. Commercial vehicle and engine production fared slightly better, however, they were still subject to -61.6% and -75.0% declines respectively.
These figures provide more evidence as to why UK industry needs dedicated support to drive a successful restart. Whilst the assistance from government so far has been vital in keeping many businesses afloat, measures to boost cashflow such as additional and tailored finance schemes, tax relief and business rates deferral would be welcome to deliver immediate results when liquidity is still a major challenge.
Restart and recovery were key topics at SMMT’s annual International Automotive Summit, which was held virtually for the first time this week. Featuring a condensed three-hour agenda, the event featured industry and political speakers, including keynotes from the Business Minister, Nadhim Zahawi MP; his Opposition equivalent, Lucy Powell MP; Dr. Christian Dahlheim of Volkswagen AG; Adrian Hallmark of Bentley Motors; and Ford of Britain’s Dr Graeme Hoare OBE, as well as panels on innovation and the return to business. The event drew more than 680 attendees from 10 different countries across the world.
The Summit also provided the platform to launch SMMT’s second UK Automotive Trade report, which focuses on stimulating trade in a post-Covid world and the risks to the UK’s status as the world’s 10th largest trading hub, which may result if we only achieve a ‘bare bones’ or no-deal Brexit.
The report highlights the potential to build on past successes as global markets recover, identifying key growth regions that the UK is well placed to serve, if the right conditions are in place. It sets out key recommendations for government and industry to help the sector take advantage of opportunities, grow existing trade relationships and unlock new markets, and I encourage you to read it here.
I would also encourage you to consider joining a Innovate UK webinar on Aerospace and Automotive taking place on 31 July. The virtual workshop will focus on supply chain challenges and opportunities for supply chain design, integration and optimisation within the sectors. To sign up, please click here.
Finally, EU-UK FTA negotiations will be the focus of an SMMT seminar on Wednesday 1 July at 10.00. As coronavirus has consumed the industry, time to prepare for the end of the transition period is now scant, and the further shock of a hard Brexit would put the very viability of this critical sector at stake. To prevent this, there needs to be an injection of new life into the negotiations to ensure a comprehensive tariff-free, quota-free FTA. To join the discussion please click here.