Motoring? Car industry defies Brexit warnings with EU export surge
UK car production saw its third successive month of growth in April, as easing supply chain shortages and strong exports drove growth.
Car production ramped up 9.9 per cent to 66,527, 5,973 more than in April last year at the heights of the global semiconductor shortage.
The SMMT said that the rise in production was down in part to a surge in exports, which were up 14.7 per cent at 54,280.
The EU stayed the most significant export market for the sector with 58 per cent of UK-produced cars shipped to the bloc, ahead of the US, China and Australia.
Electric vehicles also saw significant growth, with production of hybrid electric, plug-in hybrid and battery electric vehicles up 56.2 per cent, representing well over a third of total production.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), said “UK car production is starting to motor again, good news for the sector and the many thousands of jobs and livelihoods it sustains.
“These figures also show how exports, particularly to Europe, continue to be the foundation of British automotive manufacturing so we must do all we can to safeguard the competitiveness of these trading relationships.”
Brexit troubles
The figures come just a week after Vauxhall-owner Stellantis warned the government that some of its UK factories could close without a renegotiation of post-Brexit trading arrangements.
Stellantis says that so-called rules of origin next year, which state that 45 per cent of an electric car’s value must be sourced within the UK and EU in order to avoid tariffs, could see it hit by a 10 per cent tax on its exports.
Hawes said the sector must “find a solution to the rules of origin challenge faced by manufacturers on both sides of the Channel, else we risk the application of tariffs – and therefore unnecessary cost – on the very vehicles we are trying to encourage consumers to purchase.”
“The sector, both in the UK and EU, is calling for a pragmatic solution to be found urgently… giving Britain and the EU more time to establish the local supply chains needed to drive a successful transition to zero-emission mobility.”
According to reports in the BBC yesterday, the UK looks set to pip Spain in the race to host a crucial multi-billion dollar gigafactory in Somerset, which had been touted as criticial to helping Britain secure its electric car supply chain.
Richard Peberdy, UK head of automotive for KPMG said: “The UK car industry’s post-pandemic recovery continues, with export growth a major factor – primarily driven by demand from European markets.”
“As has recently been voiced, the car industry in the UK and Europe is becoming increasingly concerned about changes to rules of origin when 2024 begins.”
“The need for a higher percentage of an electric vehicle to be sourced from within the UK or EU poses significant challenge, especially as battery production is still in its infancy within Europe.”