Banning diesel and petrol cars is a sound-bite that won’t work, says SMMT president

Policies that seek to ban diesel and petrol cars from towns and cities is a knee-jerk reaction that ignores the efforts the automotive sector has made to produce less polluting vehicles, the president of the Society of Motor Manufacturers and Traders (SMMT) has said.

Tony Walker used his speech at the SMMT’s annual dinner to address the issue of air quality. He focussed on the automotive sector’s efforts to invest in new technology and improve air quality in towns and cities.  Walker said automotive sector is keen to highlight that the latest Euro 6 vehicles bring significant benefits in terms of low emissions and meeting climate change targets. These newer, cleaner vehicles should not be unfairly penalised in government plans, he argued.

“Banning diesel and petrol cars might be a sound-bite that works but it’s not a policy that works,” he said. “If you ban them you disrupt the new car market and you hamper investment in the electric, emission-free vehicles of tomorrow. You set the future back.

“We have invested billions of pounds in clean, low emission technologies. Leading change by electrifying the market through the introduction of hybrids, plug-in hybrids, battery electric vehicles and hydrogen fuel cell cars. The internal combustion engine is not dead: it is the path to a cleaner and greener future.

Walker is deputy managing director of Toyota Motor Manufacturing UK and managing director of Toyota Motor Europe’s London office. He became the SMMT’s 80th president in January 2017 and will serve until 31 December 2018.

More than 1,100 industry leaders, government representatives and other stakeholders attended the Society’s 101st Annual Dinner in London. Business secretary Greg Clark was among the attendees.

The SMMT president welcomed the draft “Industrial Strategy”, which Clark unveiled earlier this week. Walker also praised the government for its on-going support for the work of the UK Automotive Council, which was established to enhance dialogue and strengthen cooperation between the UK government and the automotive sector. Walker highlighted government and industry collaboration via the Advanced Propulsion Centre and the Centre for Connected and Autonomous Vehicles (CCAV).

However, Walker urged government not to undermine the UK automotive industry’s competitiveness due to slow progress on Brexit. He said there is no substitute for free and frictionless trade, and called for quicker progress on agreeing a transition period following Brexit. The SMMT president said that while the Prime Minister Theresa May has embraced the need for a period of transition to avoid a post-Brexit cliff edge, “we need to see concrete progress, and quickly.” He added that transition should be on the current terms and not time-limited in order to give industry time to adjust and secure long-term investment decisions.

“We will never stop striving to be competitive,” said Walker. “But we ask government to help provide the conditions in which we can compete. Like every other industry, we need certainty now. As an industry we are strong, resilient, and innovative. Not fearful of the future but keen to grasp the opportunities we are creating together. I am very proud that today our UK automotive industry competes globally on quality, productivity, flexibility and cost. We have delivered an export-led renaissance. But we are not complacent. Competitiveness comes hard-won. It can be easily lost. A hard Brexit would undermine all that we have collectively achieved. It is a real threat – a hurdle we cannot ignore.”

The lack of progress over Brexit was already having an impact on the automotive sector, he warned. “We have huge challenges,” said Walker. “Consumer confidence has fallen leading to a downturn in sales. Uncertainty about Brexit – and market confusion over diesel – are taking their toll.

“After all the difficulties we have overcome, all the changes we have made and the innovations we have brought, we do not need trade barriers to be our next challenge. We are an industry with the character to overcome major obstacles. And we are working hard to maintain our competitiveness. But don’t test our character unnecessarily. In the last 40 years we have succeeded. We have torn down so many barriers. Please don't allow new ones to be erected."

He spoke as SMMT released new figures illustrating the possible consequences of a “no deal Brexit” for the sector. The society warns a move to World Trade Organisation (WTO) tariffs would add at least £4.5bn to the industry’s annual overheads. It also worries the imposition of customs checks, red tape and fees on goods that currently move friction free across borders. Every day more than 1,100 trucks for UK car plants cross into the UK from the Continent – the vast majority without being checked at customs. These lorries deliver some £35m worth of components to UK vehicle and engine plant to help build 6,600 cars and 9,800 engines a day. The bulk of vehicles built in Britain are then shipped back to EU customers and assembly plants.