UK vehicle manufacturing output slides as headwinds increase
Commenting on the latest SMMT UK vehicle manufacturing data, Emily Sawicz, Director and Industrials Senior Analyst at RSM UK, said:
“Today’s SMMT figures are further evidence that the UK automative industry is at crisis point. At a time when it was already struggling, the war in the Middle East will add to its woes, not only pushing up energy prices but also disrupting the supply chains of key input materials with car makers “panic-buying” aluminium amid fears of a supply shortage.
“Ironically, at a time when petrol and diesel prices are rising, what car manufactures need is for the government to allow them to sell more ICE vehicles now by flexing the EV transition targets. Whilst allowing the sale of more petrol and diesel vehicles now seems counter intuitive, doing so will ease some of the pressure on manufacturers – partly because they can be sold at a higher margin than EVs, where manufacturers are discounting heavily to compete with Chinese imports.
“Longer term of course, the EV transition is vital and the war only emphasises how important it is to reduce the reliance on imported oil.
“With automotive demand under pressure, Volkswagen’s move towards defence highlights how re-purposing industrial capability could become a survival strategy for the sector.”