UK car industry calls for government action amid production slump

The UK automotive sector is calling on the new government to implement a robust industrial strategy to support the transition to electric vehicles, after another month of falling production.

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

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

The sector has faced significant challenges since its peak in 2016, initially due to Brexit-related investment shifts and subsequently due to supply chain disruptions caused by the pandemic. This year, the transition to electric vehicles (EVs) is one of the main focuses. Jaguar is closing its Castle Bromwich factory in Birmingham to switch completely to electric models from next year, while Nissan in Sunderland and BMW Mini in Oxford are modernizing their machinery and assembly lines to produce electric vehicles.

Mike Hawes, CEO of SMMT, highlighted the importance of maintaining foreign direct investment for the survival of the sector. “With the general election still weeks away, the next government must create enabling conditions for the competitiveness of UK industry 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 requirements include:

– Providing cheap, carbon-free energy to reduce manufacturers' high energy costs and help achieve decarbonization goals.
– Ensure a skilled workforce suitable for the future needs of the industry, especially given the sector's historical dependence on migrant workers from the EU.
– Securing free trade agreements with existing and emerging markets.
– Supporting the domestic market for new electric vehicles through tax incentives and the development of a nationwide network of public charging infrastructure.

Hawes claimed that these measures would increase the sector's competitiveness, boost economic growth and create jobs across Britain, while promoting environmental objectives.

The scale of the challenge was underlined by Jaguar Land Rover's announcement to train 11,000 workers to produce battery electric vehicles and hire 950 electrical engineers. The company emphasized that electrification offers opportunities for individuals from different backgrounds, noting that EV work is more process-oriented and less physically demanding than traditional work with combustion engines, making it more accessible, including for neurodiverse workers.

The UK car industry's plea underlines the urgent need for strategic government support to get through this critical transition period.

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