The effects of the pandemic, including supply chain disruption, skills shortages and punitive energy costs, continue to challenge businesses across the entire sector. This week, the UK automotive sector looked to the Government and its Autumn Budget for some much-needed support and relief.
The Budget included some significant policies for automotive, recognition of the importance of the sector, its ability to drive innovation and exports, and to create well-paid, highly skilled green jobs across the country, all of which are critical to the Government’s agenda of an exporting nation, leading on decarbonisation and “levelling up” across the UK.
The most notable of these policies came when the Chancellor announced his decision to adjust business rates to allow relief on renewable energy and the extension of the super-deduction. Together with the Global Britain Investment Fund, which provides £817m to support the technological transition of automotive manufacturing and the £620m, announced last week, for incentives and charging infrastructure, there is evidence that Government recognises the critical role the automotive sector needs to play.
However, the Budget also represented something of a missed opportunity to provide the additional support that the industry needs right now. For the UK to attract the investment that a modern, competitive and decarbonised industry needs, a more fundamental change in business rates is still necessary – one that actually incentivises the continued investment in plant and machinery that factories need to be at the cutting edge of operation efficiency.
Additionally, with the global shortage of semiconductors continuing to hamper production levels, and the output of cars and engines declining by -41.5% and -36.3% respectively as a result, the Budget failed to offer meaningful short-term support to businesses, and while commercial vehicle output increased slightly, by 1.8%, during the month, the sector is not out of the woods yet.
However, there was some good news this week with almost a third of all cars produced during September either battery electric or plug-in hybrid, a new record high equating to some 21,679 units. This highlights the extent to which UK automotive is spearheading the change towards Net Zero, a topic which will be front and centre at SMMT’s Electrified 2022.
Held on Wednesday 23 March 2022, the event, which will build on the success of the inaugural Electrified event earlier this year, will focus on how industry, stakeholders and government can join forces to accelerate the transition to zero emission mobility.
Tickets for the SMMT Electrified 2022 are now available and I hope to see many of you there. SMMT Members are eligible for one complimentary ticket per member organisation. For information on tickets and sponsorship opportunities, please contact firstname.lastname@example.org.