CEO Update

Exports propel UK auto output in 2023 – and sharp policy can give us the edge

26 January 2024 #CEO Update

The latest industry figures out this week show what a difference a year can make, with UK vehicle manufacturing output topping one million units in 2023, for the first time since 2019. Receding supply chain constraints and unprecedented levels of investment helped put the sector firmly back on track. Record electrified car volumes also helped the total value of all cars made surpass £50 billion – while commercial vehicle output was at its highest since 2010. Significantly, growth was driven by overseas demand, with car exports up almost a fifth and commercial vehicles more than a quarter.

It puts the sector in a far stronger position than 12 months ago but the challenges are unrelenting. Britain must ensure it remains an internationally attractive location for investment, and the forthcoming Budget is an opportunity to introduce measures that will shore up our competitiveness, from EV market support to affordable green energy, grid connectivity and workforce upskilling. Measures already announced must now be delivered, such as the government’s Advanced Manufacturing Plan and full implementation of Harrington Review recommendations on trade and FDI.

Given automotive is Britain’s largest goods export sector by value, placing us at the heart of trade negotiations can also drive wider economic growth. As global demand for next-generation vehicles grows, SMMT continues to champion the breadth of innovation the UK has to offer around the world. This week, members of our International team are helping members grow their businesses at the Symposium on International Automotive Technology in India and supporting a government-led trade mission to Ghana.

The UK is already among the leading markets for EV adoption and new SMMT data shows British motorists went green in more ways than one last year, with green-tinted motors reaching their highest levels since 2007. And as cars are said by some to be ‘toys for grown-ups’, ‘Barbiemania’ may have swept up some consumers, as pink car registrations rose 72.1% – albeit representing a tiny proportion of the whole market. For the fifth consecutive year, however, most drivers opted for grey.

Whatever your colour preference, safety must come first, and following concerted efforts by SMMT and members, I’m delighted to see common sense prevail in the decision to retain the current 3-1-1 MOT intervals. Government’s indefinite recognition of CE marking, also announced this week, was another key automotive priority, and will ensure our aftermarket and supply chain can source vital components without additional complexity and cost. It also demonstrates the decisive role that policy can play in reducing unnecessary burdens – boosting our industry’s prospects this year and beyond.

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