Budget 2024: Automotive sector is vital to driving growth

SMMT CEO Mike Hawes says Budget contained positives and negatives

The chancellor is right to set out measures to address the deficit while investing for future growth. The automotive industry is a growth-driving sector, fundamental to the delivery of the country’s net zero ambitions.

We therefore welcome today’s commitment of £2 billion of automotive transformation funding as part of the government’s modern Industrial Strategy.

Delivering that strategy depends on the UK being globally competitive.

Additional National Insurance Contributions will put massive pressure on the automotive supply chain which is predominantly SMEs. Next year’s spending review must find resources to fund measures that alleviate the strain on these companies and help them transition to an electrified future.

A strong manufacturing sector depends on a strong market. The lack of substantive measures to support the new car market – in particular for electrified vehicles – is hugely disappointing.

We welcome the extension of the Plug-in Van Grant and company car tax benefits, but these alone cannot drive the growth in demand needed. With the sector challenged to deliver the world’s most ambitious EV transition targets, achievement of those targets is in serious doubt. There must be an urgent review of the market and regulation, else the cost will soon be felt in reduced UK investment, economic growth and jobs.            

Mike Hawes is chief executive of the Society of Motor Manufacturers and Traders (SMMT), a trade association representing the automotive industry in the UK