The UK automotive industry has seen a significant surge in private investment, securing an approximate £20 billion in 2023, marking a substantial increase compared to the £16.2bn amassed from 2016 to 2022, according to the Society of Motor Manufacturers and Traders (SMMT), a UK trade association and key advocate for the UK automotive sector.
These findings, based on publicly announced investments in UK automotive production and research and development (R&D) from January to November 2023, reflect a remarkable growth spurt, signally the industry’s robust momentum.
In conjunction with private investments, the UK government has pledged an additional £2bn as part of the ‘Advanced Manufacturing Plan’, aiming to fortify the UK’s status as a global hub for manufacturing, innovation, and trade, as well as lead in the development and deployment of clean and digital manufacturing technologies.
Alison Jones, SMMT president and senior vice president of the global circular economy at Stellantis, commended the industry’s resilience and commitment to sustainable growth during the SMMT’s 106th Annual Dinner in London, saying: “As an industry, we have moved forward despite the instability, despite legislative uncertainty, inflation and geopolitical risk. The industry has backed itself with big decisions on big investments to guarantee jobs and our future. We have seen major commitments in battery production, lithium mining, vehicle manufacturing, R&D, and the aftermarket. Such investment – and our ability to remain competitive – is key to the continuation of a strong UK manufacturing base and a sector that sustains nearly a million livelihoods.”
The industry is reportedly ready to return to pre-pandemic levels of trade worth more than £100bn by the end of the year, but the challenge is now to scale up even further to seize the opportunities decarbonisation offers.
Factories across the UK are shifting to producing electric vehicles (EVs) of every type – cars, vans, buses, and trucks – and supply chain manufacturers are investigating the sustainable uses of batteries.
However, despite this surge in economic confidence, other challenges loom, notably regarding the Rules of Origin for moving goods between the UK and EU, which, if not deferred, could impede trade in EVs between the regions.
Mike Hawes, SMMT chief executive, stressed: “The industry is betting big on the UK, and government has rightly recognised the value that automotive manufacturing brings to the UK, backing our industrial transformation. These investments are, however, predicated on a strong domestic market. Incentives for business buyers must be matched with support for private buyers to ensure the maximum return on every penny already pledged to production. The prize for success will be a faster and fairer decarbonisation in the UK, ensuring millions have access to zero-emission mobility.”
While exports reportedly account for around 80% of production, the UK automotive industry is poised for remarkable growth, if both domestic and international markets are nurtured. Addressing logistical challenges will also be pivotal for sustained success and a seamless transition toward zero-emission mobility.