Automotive still the UK’s biggest goods exporter… and can grow further

SMMT: Mike Hawes calls for an Indistrial Strategy and inward investment that support zero-emission vehicle and battery production

It is an outstanding achievement of the UK automotive industry that as we go through our biggest transformation in a century, we remain the nation’s number one exporter of manufactured products. As reported alongside SMMT’s latest manufacturing figures published this week, fresh trade data analysis shows UK shipments of cars, vans and components now make up 13.9% of all British-built exports in the first half of the year – a significant proportion for a single sector. It means automotive exports are worth some £46.8 billion to the UK economy and, with a further £67.2 billion being imported, our total trade is worth £114 billion – a reflection of the monumental importance of our sector to the country’s growth agenda. And with the right conditions, we can grow even further.

While SMMT’s latest figures show car output fell by a fifth in September, therefore, model changeovers and plant retooling for zero-emission vehicle production largely account for the decline, and point to longer term, greener growth. Indeed, our industry has always been export-led but key to our recent trading success story is that the value of these exports has remained consistently high thanks to the increasing proportion of premium electrified models being produced.

We can go further in the right direction by securing fresh inward investment in electrification and battery manufacturing, and the forthcoming Autumn Budget and Industrial Strategy are significant opportunities to do so. In particular, the investment set out in last year’s Advanced Manufacturing Plan must be reaffirmed, with additional measures that underpin the UK’s global competitiveness: increased access to affordable green energy, improved fair and tariff-free trade agreements with major and emerging markets, and support for the new skills transition that builds on the existing strengths of our workforce.

Such a strategy must also come with urgent action to support the uptake of zero-emission cars and commercial vehicles in our home market. Manufacturers undoubtedly prefer to locate near to where they sell, and the UK can be a stronger magnet for investment with the right market support. Among the key steps are halving VAT on new EV purchases, mandating public chargepoint roll-out for cars and commercial vehicles, and matching VAT on public charging with the 5% home charging rate. We recognise there are severe constraints on the public purse, but decarbonisation of the automotive sector – in terms of manufacturing and market – can deliver the environmental and economic benefits we need.

Mike Hawes is chief executive of the Society of Motor Manufacturers and Traders (SMMT), which represents the UK automotive industry through the membership of companies involved in design, concept, manufacture, sale, after sale, disposal and recycling of motor vehicles, components and accessories.