The number of new automobiles manufactured in the United Kingdom decreased dramatically again in 2016, reaching its lowest level since 1956.
The decline is a 10% decline from 2021, which was an all-time low.
The Society of Motor Manufacturers and Traders stated that a continued global scarcity of semiconductor chips has impacted production lines.
However, automakers are concerned that the United Kingdom lacks a strategy to make it a competitive location for manufacturing investment.
The administration stated it was “committed” to maintaining the nation’s position as a global leader in automobile manufacturing.
The SMMT reported that the United Kingdom produced 775,014 automobiles in 2017. Before the Covid pandemic of 2019, the United Kingdom produced 1.3 million automobiles.
Manufacturers anticipate reaching one million automobiles once more by 2025, but returning to pre-pandemic levels will require substantial investment and the entry of new automakers into the UK.
lagging Britain?
Manufacturers worry that the UK is falling behind the US and EU in state aid.
The Inflation Reduction Act, an important piece of US legislation, will provide billions in subsidies to automakers who build electric vehicle supply chains in the United States.
According to Mike Hawes, chief executive officer of the SMMT, this will attract a great deal of international investment.
An enraged EU is contemplating retaliation by either expressly loosening state assistance regulations or doing so under the pretense of extending Covid recovery or green technology-enhancing programs.
Governments could provide to favored sectors
One of the benefits of Brexit was supposed to be freedom from EU state aid regulations that limited the amount of assistance governments could provide to favored sectors.
Mr. Hawes realised that leaving the EU could force the UK to cut aid to important industries.
Something that signals that the United Kingdom is open for business and open for these investments,” he said.
The SMMT stated that the production estimates were impacted by the closure of Honda’s Swindon factory in July 2021. And the cessation of Vauxhall Astra manufacture at Ellesmere Port in April 2022.
Mr. Hawes stated that the data demonstrated how “difficult” the year 2022 was for the UK auto industry. Even though the country produced more electric vehicles than ever before.
“The potential for this sector to contribute to economic growth by constructing more of these zero-emission models is self-evident. But we must make the right choices now,” he said.
“This requires developing a strategy to drive the rapid upscaling of UK battery production and the transition to electric vehicles based on the UK automotive industry’s fundamental strengths – a highly skilled and flexible workforce, engineering excellence, technical innovation, and productivity levels that are among the highest in Europe,” he added.
“Forward footing”
The global auto industry has already begun investing in electric vehicles and batteries, he said. And the United Kingdom had just “a few years” to act.
“We must be proactive by implementing a variety of investment-attracting initiatives,” he said.
Almost a third of all automobiles manufactured in the United Kingdom last year was completely electric or hybrid vehicles, according to the SMMT’s statistics.
The Society of Motor Manufacturers and Traders (SMMT) estimated that these automobiles would generate £10 billion in exports alone.
Britishvolt, a battery start-up, went bankrupt last week, further delaying the nation’s auto production.
The company intended to construct a massive battery factory in Blyth, Northumberland, but the project ran out of money.
Currently, there is just one Chinese-owned battery plant in the United Kingdom, adjacent to the Nissan factory in Sunderland. While 35 factories are planned or under construction in the European Union.
A government official stated, “We are committed to ensuring the United Kingdom stays one of the world’s premier destinations for automobile manufacture.”
The £1 billion investment in Sunderland in 2021 is evidence of our success, and we are expanding on this with a big investment program to electrify our supply chain and generate jobs.
