UK automobile manufacturing rose by 39.8% in September with 88,230 autos leaving British manufacturing facility strains – 25,105 greater than the identical month final 12 months, in line with the newest figures printed as we speak 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 progress in 2023, one of the best September since 2020,¹ and UK automobile making now reaching 659,901 models 12 months thus 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 models and abroad shipments rising 32.2% to 64,727 models. Notable progress was delivered in main markets: the US up 19.8% to six,591 models; China up 28.2% to 4,776 models; and Turkey up 212.0% to 4,162 models. Nonetheless, the EU continues to be Britain’s main buying and selling accomplice by far, 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 international markets has risen by 16.3% to 524,973 models since January, with electrified autos accounting for greater than a 3rd (37.5%) of outbound shipments, up from 26.4% a 12 months 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 beneath menace, nonetheless, from January 2024 when harder guidelines of origin for batteries come into pressure. Given the worth of batteries to the entire 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 end in a ten% tariff which if totally handed on would elevate the common price of UK-built battery electrical autos (BEVs) by £3,600 in Europe, whereas EU-made BEVs offered within the UK would see a median £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 instantly achievable by the present TCA framework without having for formal renegotiation.

Mike Hawes, SMMT Chief Govt, mentioned,

A very sturdy interval of automobile making is nice information for the UK, given the 1000’s of jobs and billions of kilos of funding that depend upon the sector. With nations around the globe shifting to zero-emission motoring, Britain is properly positioned to be a world EV manufacturing hub if the funding and buying and selling circumstances are proper. Given the rising significance of electrified automobile manufacturing, the primary and pressing step is for the UK and EU to comply with delay the harder guidelines of origin necessities which can be due imminently. This could give the mandatory respiratory 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 secure, long-term transition.

SMMT’s newest report printed final week, Open Roads – Driving Britain’s international automotive commerce, outlines a collection of suggestions that might guarantee automotive progress is long run, with progressive commerce agreements, a gorgeous funding surroundings and a vibrant home provide chain all important 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 masking BEVs (vehicles) solely. The ten% tariff applies to the manufacturing facility 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