Business backs industrial technique with £50bn enhance blueprint
The UK automotive business has thrown its full assist behind the federal government’s newly launched Industrial Technique whereas unveiling its personal 10-point plan.
The programme is aimed toward restoring Britain to the worldwide high 15 automobile manufacturing nations by 2030 and delivering an financial enhance price £50 billion over the following decade by enterprise charges reform, power value aid, improved capital allowances and funding in expertise.
Unveiled on the Society of Motor Producers and Merchants (SMMT) annual summit in London, the plan – detailed in a brand new SMMT report titled The Aggressive Edge: Driving Lengthy-Time period UK Automotive Development – units out the sector’s dedication to leveraging the technique’s momentum, whereas urging swift motion on key value and competitiveness challenges.
SMMT chief govt Mike Hawes hailed the Industrial Technique as a turning level, significantly its £2.5 billion Drive35 fund for automotive capital and R&D, calling it “a recognition of automotive as a pillar of superior manufacturing.”
“Now we should profit from that place and put in place the appropriate circumstances for development,” he mentioned.
The SMMT’s new report, which incorporates findings from the primary UK Automotive Enterprise Leaders Barometer, highlights each optimism and concern throughout the sector.
Whereas over half of surveyed companies have not too long ago secured or are planning funding, almost three-quarters (73.5%) reported rising operational prices previously yr, and nearly half (46.9%) noticed profitability fall.
Some of the pressing challenges recognized is the UK’s industrial power pricing, which stays the very best in Europe.
Automotive producers face power taxes six occasions the European common, pushing electrical energy payments up by over £200 million in 2024 alone.
SMMT is urging that battery manufacturing power reliefs be prolonged to the broader automotive sector, significantly because the business transitions to electricity-heavy EV manufacturing.
The report additionally warns that the UK stays behind on key electrification targets. Regardless of £6.5 billion in EV incentives over the previous 18 months, client demand stays weak – with 52% of business leaders believing the UK is considerably off-track to fulfill the 2030 phase-out of petrol and diesel automobiles.
Further limitations embrace authorities insurance policies such because the Automobile Excise Obligation Costly Automotive Complement, which has imposed a £360 million hit on EV patrons from April this yr.
SMMT is looking for focused client incentives, together with ECS reform and VAT cuts on EVs and public charging, to reignite demand and strengthen the home EV market.
Regardless of these challenges, SMMT notes that current commerce and diplomatic developments provide encouragement with the current UK-US deal mitigating the affect of damaging tariffs, together with the India free commerce settlement and EU commerce reset.
