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SMMT urges Government to avert automotive industry 'cliff edge'

Mike Hawes, SMMT

The Society of Motor Manufacturers and Traders (SMMT) has set out its priorities to assure the UK automotive industry’s future success – a year ahead of Brexit.

New figures compiled in Production Outlook, an independent forecasting report released today, have revealed that the UK’s vehicle production output will fall this year to around 1.729m but should climb to 1.8m by 2023.

But while the SMMT said that the agreement of a Brexit transition period, designed to allow business to continue as usual while a new UK-EU trading relationship is negotiated, provides some welcome breathing space, it said in a statement that the industry “now seeks rapid progress on key automotive concerns to avoid another cliff edge on 31 December 2020”.

It said that UK competitiveness starts with local conditions, stating: “Business rates, capital allowances and energy costs, for instance, must all be globally competitive; training and skills for a productive workforce must focus on new technologies and the UK supply chain must be attractive to investment.”

The SMMT said that the manufacturing sector is already one of the UK’s most important economic pillars, delivering an annual £22.8 billion direct to the Treasury, employing 169,000 people and responsible for 13% of all the UK’s export in goods.

However, new figures published today show that the true scale of the sector’s economic contribution is significantly larger, at around £219 billion.

The National Franchised Dealers Association (NFDA) estimates the 590,000 people are currently employed within the automotive retail sector alone.

A new SMMT study of economic figures highlights the industry’s impact on adjacent sectors, however, and claims that “some 200,000 people are employed in new car retail”, adding that UK-based car finance firms employ over 45,000 more, with an annual £12.5 billion economic contribution.

On the road, the vehicle fuel industry supports 40,000 jobs, meanwhile, and a further 347,000 are employed in vehicle servicing and repair, it said.

Mike Hawes, SMMT chief executive, said: “Last week’s deal on the transition period was essential, providing a short term boost and a degree of certainty for investors. The next major hurdle will be securing a new, comprehensive trade agreement with the EU and our partners across the world.

“In the meantime, Government must help make the UK as competitive as possible.

“Government’s Industrial Strategy and Automotive Sector Deal are positive steps but we need concrete action if we are to stay ahead in what is an intensely competitive global environment.

“New figures out today show the positive impact our industry has on other sectors so it is vital that automotive competitiveness is front of mind for policy makers.”

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