UK automotive manufacturing soars as trade warns of looming Brexit guidelines ‘menace’

UK carmakers have recorded their finest September since 2020 – however warned progress is “below menace” from new Brexit export guidelines on account of come into power inside months.

Greater than 88,200 autos rolled off manufacturing facility strains in September, a rise of over 25,100 – virtually 40% – in comparison with the identical time final yr, figures revealed on Thursday reveal.

The Society of Motor Producers and Merchants (SMMT) described the interval as a “triple success”, because it was additionally the sector’s strongest month of progress in 2023 to date and one of the best outcomes for a September in three years.

The trade physique mentioned the rise was pushed by a 32% progress in exports – with virtually six in 10 autos going to the EU. Output of electrical autos (EV) additionally soared by 41.5%.

SMMT chief govt Mike Hawes hailed the figures as “significantly sturdy” and “excellent news for the UK, given the hundreds of jobs and billions of kilos of funding that rely upon the sector”.

Nonetheless, it comes solely months earlier than new “guidelines of origin” Brexit commerce laws are on account of come into power in January 2024.

Below the measure, 45% of the worth of an EV should originate within the EU or UK for it to keep away from being slapped with a ten% commerce tariff.

The goal is tougher to realize for electrical automobiles and vans, as most producers depend on batteries produced in Asia and the elements comprise a big proportion of the entire worth of such autos.

The SMMT mentioned the trade’s progress within the UK, significantly from the manufacture of EVs, was “below menace” from the approaching introduction of the brand new guidelines and referred to as for them to be delayed by three years.

It warned the tariff may elevate the typical value of UK-built battery electrical autos by £3,600 in Europe, whereas EU-made fashions offered within the UK may expertise a median worth hike of £3,400.

Mr Hawes mentioned: “Given the rising significance of electrified automotive manufacturing, the primary and pressing step is for the UK and EU to comply with delay the harder guidelines of origin necessities which are due imminently.

“This may give the mandatory respiration house for automotive sectors on either side of the Channel to scale up gigafactories and inexperienced provide chains, each of that are important for a steady, long-term transition.”

The SMMT mentioned the amount of British automobiles exported to international markets has risen by 16%, to greater than 500,000 items, since January, with EVs accounting for greater than a 3rd of shipments, up from 1 / 4 a yr in the past.

Vauxhall’s mother or father firm Stellantis has additionally referred to as for a delay within the introduction of the principles – that are a part of the 2020 Commerce and Cooperation Settlement between the UK and EU.

Each the British and German governments have additionally been lobbying for the laws to be modified, whereas BMW board member Milan Nedeljkovic advised media final month he was optimistic they’d be eased.

A authorities spokesperson mentioned: “We’d like a joint UK-EU resolution to keep away from customers dealing with tariffs on electrical autos from 2024 which don’t apply to petrol and diesel automobiles.

“We’ve got raised this with the European Fee and trade and are able to work with them to discover a resolution inside the present construction of the Commerce and Cooperation Settlement. The UK stays among the finest areas on this planet for automotive manufacturing.”