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September saw the strongest month of growth for UK car manufacturing this year, increasing by almost 40 per cent in September, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT)i.

Andrew Whicher, Product Director, Cooper Solutions looks at the particularly strong period of car making which is good news for the UK, given the thousands of jobs and billions of pounds of investment that depend on the sector. 

During the ninth month of the year, 88,230 vehicles left British factory lines, representing an uplift of 39.8 per cent and the best September since 2020.

Output increased for both domestic and export markets, with production in the UK up 65.9 per cent to 23,503 units and overseas shipments rising 32.2 per cent to 64,727 units.

With the increasing importance of EV trade with mainland Europe in particular – bilateral trade which has more than doubled in value in the last three years – SMMT stated the tariff-free trade set out in the UK-EU Trade Cooperation Agreement (TCA) must be maintained. From the beginning of next year, tougher rules of origin for batteries will come into force. Given the value of batteries to the total cost of an EV, SMMT said the rule changes threaten the competitiveness of both UK exports to the EU and EU imports to the UK market.

The trade association said failure to comply will result in a 10% tariff which if fully passed on would raise the average cost of UK-built battery electric vehicles (BEVs) by £3,600 in Europe, while EU-made BEVs sold in the UK would see an average £3,400 price hike.

It added that a three-year delay to the implementation of these new requirements would maintain competitiveness, supporting British and European manufacturers, and is readily achievable through the existing TCA framework with no need for formal renegotiation.

Andrew commented: “After a slower August, it’s promising to see the strongest month for UK car manufacturing so far this year.  The UK manufacture of electric vehicles is up again, putting Britain in a solid position to become a leading EV manufacturing hub, particularly for EU countries as Britain’s leading trading partners.”

i https://media.smmt.co.uk/september-2023-uk-car-manufacturing/