CEO Update

Welcome growth for UK car and CV production

26 August 2022 #CEO Update

This week’s figures from SMMT show UK car manufacturing increased for the third month in a row in July, up 8.6% – although that is compared with last year’s pandemic-hit production that saw the worst July since 1956. The ongoing shortage of semiconductors continues to limit manufacturers’ volumes, with last month -46.4% below 2019. However, the growth in output is a sign that supply challenges that have blighted the sector may finally be beginning to ease, and that it can refocus on its pandemic recovery.

The UK commercial vehicle sector, meanwhile, has continued its strong performance, with growth for the eleventh consecutive month, up 43.9% in July to its highest since 2016. That rounds off the best-performing first seven months to a year since 2012, at 58,693 units.

This is testament to the quality of CVs made in Britain, but success is not guaranteed, as we face some of the toughest economic conditions in living memory. Urgent action is needed to tackle the alarming rise in energy costs faced by British factories across the automotive sector.

Time is of the essence: in 2024, we face a zero emission vehicle mandate, starting at 22% per brand and rising rapidly to 80% per brand by 2030. We want those EVs to be made not just for the UK market but for exports, however, stricter Rules of Origin requirements also due to begin in 2024 could impact on tariff-free trade in EVs.

If Britain is going to attract the investment it needs to drive the production of these vehicles, urgent action is needed to mitigate the major costs facing business, while putting the UK in a competitive position for manufacturing and investment.

This must be a priority for the next Prime Minister, else we risk falling behind our global rivals and, in consequence, losing out on jobs and economic growth.

Greater consumer confidence in buying EVs is another key area of Britain’s net-zero ambitions, and the local electric vehicle infrastructure (LEVI) pilot funding announced this week is a welcome step that will encourage motorists in the winning regions to make the switch to electric motoring. Hopefully, it will also inspire operators and local authorities across the UK to increase the roll-out of chargepoints.

With manufacturers bringing an ever growing number of plug-in vehicles to UK roads, we can’t allow lacklustre infrastructure to hold back Britain’s world-leading electric vehicle ambitions. We need a universal right to charge electric vehicles, for all drivers, wherever they live, wherever they travel, and whatever their needs.

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