TNB News

Sensible export trade rules will lock in CV growth

26 October 2023 #TNB News

Such has been the success of the commercial vehicle sector in recent years that we’re now comparing strong performances with each other – and SMMT’s UK CV production figures show a huge 11,352 new vans, buses, trucks, coaches and taxis rolled off British factory lines in September. That’s the best monthly performance of 2023, up 61.1% on pre-pandemic 2019. And it follows an exceptional September last year when output grew by more than half, amid a swell in export demand.

This September, there was a 10.3% increase in orders from UK buyers, totalling 5,124 units, which is positive news as it means more British-built cutting-edge technology on our roads, with all the benefits that brings. But our industry is of course also strong exporter, and while the number of CVs being shipped overseas fell by -15.1% to 6,228 units, these still represented some 54.9% of all output. Given our long-term ties with markets on the other side of the English Channel, demand from the EU is the driver and destination for 95.7% of all UK exports in the month.

As in Britain, a growing number of these vehicles are increasingly electrified, with production of zero emission vehicles becoming ever more important for both the competitiveness of UK manufacturers and success of decarbonisation. These opportunities are at risk of being undermined, however, with tougher UK-EU TCA rules of origin for batteries that come into force in January, bringing with it the prospect of tariffs on electric vehicles made either in the UK or EU.

This drain on competitiveness will effectively create more barriers to acquiring the very vehicles that governments want to encourage us to drive. An urgent and sensible resolution is needed – and a three-year delay would provide automotive sectors across Europe with more time to scale up their battery gigafactory capacity, while strengthening their green supply chains. That’s the situation envisaged when the TCA was originally signed, but before global supply chain challenges impacted on our ambitious timelines.

SMMT is fully engaged on this issue, and we heard from Kemi Badenoch, Secretary of State for Business and Trade, at SMMT’s Global Trade Conference last week about her confidence that a more beneficial arrangement can be achieved. There are also pleas for action in Europe and yesterday, the pan-European automotive trade association, ACEA, echoed our call in a letter to European Commission President Ursula von der Leyen.

There should be more encouragement for operators that want to commit to zero emission fleets, but free, fair trade is crucial to delivering their ambitions too. With the Zero Emission Vehicle Mandate beginning in January, timely action is needed before – and not after – we enter this critical juncture.

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