UK automotive sets out Brexit priorities with 12 months to go

28 March 2018

The UK has one year left of its full European status before Brexit occurs. Within all the concerns of various industries, the automotive market has been vocal about the potential impact should discussions not go well with the EU Commission.

The Society of Motor Manufacturers and Traders (SMMT) has now set out its priorities to assure the UK automotive industry’s future success. The move follows agreement of a Brexit transition period, designed to allow business to continue as usual while a new UK-EU trading relationship is negotiated.

While the body believes the deal provides breathing space, it is worked that without rapid progress on key concerns raised by the industry, the market will find itself at another cliff edge when the transition period ends on 31 December 2020. With decisions on new vehicle models in the UK due in the next 12 months, the SMMT believes it is essential that both industry and government do all they can to secure this investment and safeguard the thousands of jobs that accompany such decisions.

New figures from the Production Outlook, an independent forecasting report, predict there will be modest fall in UK vehicle production to 1.729 million in 2018 and 1.713 million in 2019. If positive production decisions are made for the UK on a number of future models, production could climb to over 1.8 million by 2023.

In a statement, the SMMT says: ′Our continued ability to trade freely with our biggest partner, the EU, and key global markets is essential, but UK competitiveness starts with local conditions. Business rates, capital allowances and energy costs, for instance, must all be globally competitive; training and skills for a productive workforce must focus on new technologies and the UK supply chain must be attractive to investment.’

Mike Hawes, SMMT Chief Executive, adds: The deal on the transition period was essential, providing a short-term boost and a degree of certainty for investors. The next major hurdle will be securing a new, comprehensive trade agreement with the EU and our partners across the world. In the meantime, the government must help make the UK as competitive as possible.

Government’s Industrial Strategy and Automotive Sector Deal are positive steps, but we need concrete action if we are to stay ahead in what is an intensely competitive global environment. New figures out today show the positive impact our industry has on other sectors, so it is vital that automotive competitiveness is front of mind for policymakers.

Remaining part of the single market and customs union continued access to EU talent, and the ability to benefit from preferential EU trade agreements with third countries remain the UK Automotive industry’s priorities in the future EU-UK relationship. Equally important, however, is the need for the UK to maintain influence within EU regulations. Unease over this has seen manufacturers seek type approval in the EU, rather than use the UK’s Vehicle Certification Agency (VCA).