UK automotive manufacturing rose by 39.8% in September with 88,230 autos leaving British manufacturing unit traces – 25,105 greater than the identical month final yr, in keeping with the newest figures revealed at present by the Society of Motor Producers and Merchants (SMMT). It means September is a triple success for the sector, with it being the strongest month of development in 2023, the very best September since 2020,¹ and UK automotive making now reaching 659,901 items yr so far – some 14.9% above the identical interval in 2022.

Output elevated for each home and export markets, with manufacturing for the UK up 65.9% to 23,503 items and abroad shipments rising 32.2% to 64,727 items. Notable development was delivered in main markets: the US up 19.8% to six,591 items; China up 28.2% to 4,776 items; and Turkey up 212.0% to 4,162 items. Nonetheless, the EU continues to be Britain’s main buying and selling accomplice by a ways, with 37,563 UK-built vehicles shipped to the bloc within the month, up 46.1% on final September and representing 58.0% of the sector’s abroad commerce.

The amount of British vehicles exported to world markets has risen by 16.3% to 524,973 items since January, with electrified autos accounting for greater than a 3rd (37.5%) of outbound shipments, up from 26.4% a yr in the past. Given the rising significance of EV commerce with mainland Europe specifically – bilateral commerce which has greater than doubled in worth within the final three years² – the tariff-free commerce set out within the UK-EU Commerce Cooperation Settlement (TCA) should be maintained.

That is below risk, nonetheless, from January 2024 when harder guidelines of origin for batteries come into power. Given the worth of batteries to the full price of an EV, the rule modifications threaten the competitiveness of each UK exports to the EU and EU imports to the UK market. Failure to conform will lead to a ten% tariff which if absolutely handed on would elevate the typical price of UK-built battery electrical autos (BEVs) by £3,600 in Europe, whereas EU-made BEVs offered within the UK would see a mean £3,400 value hike³. A 3-year delay to the implementation of those new necessities would, nonetheless, preserve competitiveness, supporting British and European producers, and is quickly achievable via the prevailing TCA framework without having for formal renegotiation.

Mike Hawes, SMMT Chief Govt, mentioned,

A very robust interval of automotive making is nice information for the UK, given the hundreds of jobs and billions of kilos of funding that rely on the sector. With international locations around the globe shifting to zero-emission motoring, Britain is properly positioned to be a worldwide EV manufacturing hub if the funding and buying and selling situations are proper. Given the rising significance of electrified automotive manufacturing, the primary and pressing step is for the UK and EU to conform to delay the harder guidelines of origin necessities which can be due imminently. This is able to give the mandatory respiration house for automotive sectors on each side of the Channel to scale up gigafactories and inexperienced provide chains, each of that are important for a steady, long-term transition.

SMMT’s newest report revealed final week, Open Roads – Driving Britain’s world automotive commerce, outlines a sequence of suggestions that will guarantee automotive development is long run, with progressive commerce agreements, a pretty funding atmosphere and a vibrant home provide chain all essential to a profitable transition.

1 September 2020 manufacturing: 114,732
2 UK-EU bilateral EV commerce 2020: £7.3bn; UK-EU bilateral EV commerce 2022: £15.3 billion.
3 SMMT calculations overlaying BEVs (vehicles) solely. The ten% tariff applies to the manufacturing unit gate price of the car. Import prices primarily based on JATO total market common value, export worth primarily based on SMMT personal estimates.

SOURCE: SMMT