CEO Update

Border delays could stall UK automotive

12 February 2021 #CEO Update

Across many sectors, British exporters to the EU are clearly facing ongoing difficulties, with border disruption caused by new Brexit red tape, increased costs and the impact of the pandemic on staff all bearing down on businesses. The automotive industry is not immune to these challenges, with global supply chains so deeply integrated, and while the UK sector was as well prepared as any, given the uncertainties, for new trading conditions from 1 January, being hit with significant disruption as well as increased container and haulage costs is taking its toll.

Everyone is working furiously behind the scenes to keep production going and some firms have even resorted to expensive air freight to maintain manufacturing output. With trade volumes at borders now on the increase, and full customs controls set to come into force in July, it is essential government works with the automotive industry, hauliers and customs intermediaries to ensure smooth and efficient border operations, now and in the future.

The £20 million Brexit Support Fund announced this week to support SMEs in adjusting to new customs, rules of origin, and VAT rules when trading with the EU, is of course welcome. However, with firms already experiencing delays and issues at the borders, the funding cannot come soon enough. It is imperative that the government ensures this money reaches SMEs quickly and with as little bureaucracy as possible to help mitigate current challenges.

Elsewhere, this week saw the release of the 2020 UK used car figures, the market declining by -14.9% with some 6.7 million cars changing hands, yet more evidence of the damage wrought by the pandemic. There was some good news, in particular with demand for used battery electric vehicles rising by 29.7%. However, this performance still only accounted for 0.3% of all transactions and provides further proof of the seismic shift needed to move to widespread zero emission transport.

The priority now must be to allow car showrooms to re-open as soon as possible as wider restrictions are eased. This will not only help the used market recover, supporting jobs and livelihoods and providing individuals with the personal mobility they need at a time when guidance is against using public transport, but it will also enable the latest and cleanest vehicles to filter through to second owners and ultimately help everyone on the Road to Zero.

As the sector continues to make strides towards net zero, and with road transport decarbonisation at the heart of the government’s green ambitions and recovery, SMMT will be hosting its first Electrified conference online on 25 March.

The landmark event will feature keynote addresses from the Rt Hon. Grant Shapps MP, Secretary of State for Transport, Anneliese Dodds MP, Shadow Chancellor of the Exchequer and Peter Rawlinson, Chief Executive Officer and Chief Technology Officer, Lucid Motors, as well as a series of panels.

More information on the event, speakers and panels can be found here and you are able to secure your place by contacting the events agency team here.

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