CEO Update

UK’s competitiveness under the spotlight

03 March 2023 #CEO Update

Much has been written in the media this week about the UK automotive sector, in particular its competitiveness as the global industry transitions to electrified vehicles. There’s no doubt we are at a critical moment, with competition to win investment to transform our automotive factories and supply chains at its most fierce.

With protectionism on the rise and talk of a global subsidy “arms race”, the UK must promote itself vigorously to ensure we are perceived as an attractive, open investment destination, with an ease to doing business and an automotive industry that builds on its strengths – assets that can be overlooked. I was pleased, therefore, to be able to highlight some of them during an evidence session of the House of Commons Business Select Committee, which is holding an inquiry into “UK PLC 2050”.

Whilst the headlines focused on the undoubted challenges we face, I was also able to point to some of our strengths: a highly skilled, flexible workforce; engineering excellence; access to renewable energy; the strong links between industry and academia plus our tremendous R&D capabilities; the plethora of world-renowned brands that operate here; and, given the focus on new technologies, the fact that we have been building zero emission cars in the UK for more than a decade.

Indeed, manufacturers are already committed to producing more electric vehicles and components here, with recent investment announcements in Crewe, Sunderland and Liverpool. And only yesterday there was more good news with the announcement by government of a £25 million boost to rollout 117 British-made zero emission buses in Yorkshire, Norfolk and Hampshire.

As the sector’s post-Covid recovery continues, we expect vehicle manufacturing to post growth worth near to £4 billion this year with output closing in on one million units – an increasing proportion of these electrified and built to meet global demand. UK Automotive is the country’s largest exporter of goods and uniquely placed to support Britain’s net zero, levelling up, innovation and global trade agendas. Increasing our competitiveness will fuel ongoing success, not just for the sector but the wider economy, with jobs and growth supported in all regions of the UK.

With increasing global tensions, this week’s agreement between the UK and EU on trade in Northern Ireland was extremely welcome. The Windsor Framework should allow a more streamlined flow of goods across borders, and moreover provides the opportunity to unlock other elements of the UK-EU Trade Cooperation Agreement. Implementing the provisions for motor vehicle technical working groups – groups which have not yet met –  and, importantly, finding solutions to mutual challenges around our future trade in electric vehicles and batteries are two examples where renewed trust and momentum will benefit both the UK and the wider European automotive industry.

The shift to zero emission vehicles was to be the focus of SMMT Electrified, scheduled to take place on 16 March. However, with industrial action now planned on and around that date, the conference is now rescheduled to Monday 18 September 2023. If you haven’t already registered for this not to be missed event, please plug the new date into your diary and sign-up here.

Finally, next week we will be celebrating International Women’s Day (IWD) with a special member event in London on Wednesday 8 March. We’re delighted to welcome our President, Alison Jones of Stellantis, as headline speaker, followed by networking with colleagues from industry and government and I wholeheartedly encourage you to join us. SMMT members can RSVP here.

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