Business

UK Car Industry Urges Government Action Amidst Production Decline

The UK’s automotive sector is calling on the incoming government to implement a robust industrial strategy to aid the transition to electric vehicles, following another month of declining production.

According to data from the Society of Motor Manufacturers and Traders (SMMT), only 61,800 cars were manufactured in April, a year-on-year decrease of 7%. This brings the total number of vehicles produced in the first four months of the year to 184,000, marking a nearly 1% decline. The SMMT warns that the industry could see an annual drop of more than 6%.

Car manufacturing is vital to the UK’s economy, with around 80% of vehicles produced being exported. Key markets include the European Union and the United States, which together account for over 70% of UK car exports. However, exports fell by 12% last month, exacerbating concerns.

The industry has faced significant challenges since its peak in 2016, initially due to Brexit-related investment shifts and subsequently due to pandemic-induced supply chain disruptions. This year, the transition to electric vehicles (EVs) is a primary concern. Jaguar is closing its Castle Bromwich plant in Birmingham to switch entirely to electric models from next year, while Nissan in Sunderland and BMW Mini in Oxford are updating their machinery and assembly lines for EV production.

Mike Hawes, SMMT’s chief executive, stressed the importance of maintaining foreign direct investment for the sector’s survival. “With a general election weeks away, the next government must create favourable conditions for the competitiveness of UK manufacturing and the necessary investment to transition to a net-zero future,” he said.

In its first official statement since the election announcement, the SMMT has called on both main parties to commit to a formal industrial strategy. Key demands include:

– Provision of low-cost, zero-carbon energy to reduce manufacturers’ high power costs and help achieve decarbonisation targets.
– Ensuring a skilled workforce suited for future industry needs, particularly given the sector’s historical reliance on EU migrant workers.
– Securing free trade agreements with existing and emerging markets.
– Supporting the domestic market for new electric vehicles through fiscal incentives and developing a nationwide network of public recharging infrastructure.

Hawes asserted that these measures would enhance the sector’s competitiveness, stimulate economic growth, and create job opportunities across the UK while advancing environmental goals.

The scale of the challenge was underscored by Jaguar Land Rover’s announcement of training 11,000 workers for battery electric vehicle production and hiring 950 electrical engineers. The company highlighted that electrification opens up opportunities for individuals from diverse backgrounds, noting that EV work is more process-oriented and less physically demanding than traditional internal combustion engine work, making it more accessible, including for neurodiverse employees.

The UK car industry’s plea underscores the urgent need for strategic governmental support to navigate this critical transition period.

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UK Car Industry Urges Government Action Amidst Production Decline