Clear policy decision urgently needed to unlock UK vehicle production growth
Commenting on the latest SMMT UK vehicle manufacturing data, Emily Sawicz, Director and Industrials Senior Analyst at RSM UK, said: “The year-on-year decrease in UK vehicle production marks a pivotal time for the sector as global competition and pressures continue to mount. With companies such as Volkswagen announcing plans for major job cuts, there is a clear need for action across the European car market to secure opportunities for future growth.
“As Chinese manufacturers continue to flush through the UK and wider European markets, domestic companies face increasingly urgent pressure to respond quickly to maintain a competitive edge. This could include utilising UK workforce and production capabilities to facilitate Chinese car production, such as with the production of Cherry international cars at Nissan’s Sunderland plant, to unlock sector growth.
“The proposed 'Made in Europe' initiative could also have a decisive impact on the UK’s export market. Inclusion in the scheme could significantly boost to UK car production activity, which would benefit from the investment incentives and subsidies available to their European counterparts. However, this will need to be balanced against any potential regulatory conflicts with domestic investment strategies, and the potential of the UK being left out of the initiative altogether.
“With potential changes to EV mandates further fuelling uncertainty in the sector, there is a risk that manufacturers will hold off from making investment decisions until the policy direction of Andy Burnham’s government becomes clear. Therefore, greater clarity is urgently needed to unlock longer-term sector growth."