Unlock the Editor’s Digest without cost
Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly e-newsletter.
The UK automobile trade is “again within the recreation” after securing £24bn of recent funding pledges final 12 months, the motor commerce physique stated on Thursday, greater than the mixed whole for the earlier seven years.
After years of curtailed spending owing to Brexit uncertainty and instability on the prime of presidency, the auto sector turned “investible” once more, with Nissan, Jaguar Land Rover, Tata and BMW all making large bulletins, the Society of Motor Producers and Merchants stated.
The upbeat evaluation comes as figures, launched by the SMMT on Thursday, confirmed UK car manufacturing rose above 1mn for the primary time since 2019. This represented a 17 per cent rise, buoyed by a wider restoration within the automobile market and powerful exports to Europe.
“We’re again within the recreation,” stated Mike Hawes, chief govt of the SMMT.
Over the previous 12 months, producers with UK crops felt capable of make important spending selections as relative political stability returned to the UK, following a tumultuous interval between 2016 and 2022, Hawes stated.
“There have been so a few years when the UK was nigh-on un-investible [with] Brexit negotiations . . . political instability, financial uncertainty, it was laborious to draw the funding,” stated Hawes. “That has now been relieved.”
Between 2016 and 2022, a complete of £17bn of recent investments into the UK auto trade had been introduced, SMMT calculations present, whereas final 12 months’s determine reached £23.7bn, boosted by £15bn from JLR and £2bn from Nissan.
Despite the fact that the investments got here largely from present manufacturing facility house owners, reasonably than new entrants, the UK nonetheless did properly to win the work due to fierce competitors from international locations in Europe akin to Spain, he added.
“Now we have shored up what we now have bought and that’s no imply feat,” Hawes stated. “Had we misplaced these, it might have made our means to claw again [production] quantity that a lot tougher.”
He warned the UK nonetheless wanted to “catch up” with European rivals, which stay forward in crucial areas akin to the event of battery factories, and wanted to enhance its vitality prices to make the nation extra engaging to new, notably Chinese language, traders.
Forging nearer buying and selling hyperlinks with Europe, which the Labour occasion has pledged to do ought to it win the final election this 12 months, would enhance the competitiveness of UK producers, Hawes stated.
The very best price for carmakers after wages remained vitality, he added, which the trade has constantly requested ministers to help with.
A number of automobile factories have made efforts to supply their very own vitality on-site, by wind generators or different turbines, however these had been held as much as issues with securing nationwide grid connections.
The variety of automobiles produced in UK factories final 12 months rose to 905,000, whereas van output climbed to 120,000.
For the approaching 12 months, an unbiased forecast for the SMMT predicted that whole output would rise once more from 1.02mn to 1.04mn, although automobile manufacturing would fall marginally as older fashions had been phased out.
Greater than a 3rd of all UK autos made final 12 months had been hybrid or electrical fashions, marking a document excessive. Nissan makes the electrical Leaf, whereas BMW manufactures an electrical Mini.
Nearly all of the automobiles made by Toyota at Burnaston in Derbyshire are hybrids, whereas Vauxhall-owner Stellantis began making electrical vans at Ellesmere Port final 12 months. JLR additionally provides automobile fashions with plug-in hybrid know-how.
Whereas UK automobile manufacturing peaked at greater than 1.6mn earlier than the Brexit vote in 2016, the closure of Honda’s Swindon plant in 2021 and JLR’s downsizing technique imply the nation could make as much as 1.1mn automobiles a 12 months. The full is unlikely to cross the historic document with out new funding, the SMMT stated.
