CEO Update

Cause for optimism as Brits get back behind the wheel

28 April 2023 #CEO Update

The automotive industry has been no stranger to challenges recently – Brexit, Covid-19, semiconductor shortages and a cost-of-living crisis – all occurring alongside the UK’s ambitious deadline for road transport decarbonisation. The good news is that, despite all of this, the sector is on the road to recovery. New SMMT figures issued this week reveal the first annual growth in car ownership since the pandemic and record levels of vans and trucks in use.

The overall number of vehicles on UK roads is now at a 40.7 million high, with newer lower and zero emission vehicles replacing older ones and in the process driving down CO2 emissions from the fleet by some 1.6%.

But there is still more to be done. Public transport is integral in providing essential mobility across the UK, so it was disappointing to see the bus and coach fleet record another fall, with fewer than 73,000 now in operation – the lowest since records began. With 16,608 vehicles taken out of service over the last decade, it throws into sharp relief the importance of encouraging operators to invest in the latest zero emission buses critical to improving air quality in urban areas.

In other news this week, the latest manufacturing figures marked the second consecutive month of growth for UK car production – up 6.1% in March and 6.0% in the first quarter of 2023. Electrified car output was also up by an impressive three quarters in March – a trend set to accelerate as new products come on stream, with more than 20 models of electric cars, vans, buses, trucks and taxis expected to be in production in the UK by 2025. The figures also showed a positive start to the year for commercial vehicle production, with volumes up in the first quarter despite temporary supply chain turbulence experienced in February and March.

Given the once-in-a-generation challenges involved in transitioning to the latest green technology, the sector must remain globally competitive. That means driving down the high cost of UK energy, reforming business rates and vigorously promoting Britain globally to secure the investments essential to a zero carbon automotive future. With other locations – notably the US and its Inflation Reduction Act – offering vast amounts of money and a comparatively simple process, and the EU responding in kind, the UK must determine how it responds – and quickly – else we could be perceived as uncompetitive at the very time decisions are being taken.

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