A new SMMT Automotive Barometer throws into sharp relief issues impacting manufacturing and dealers including low confidence in trading conditions, doubts about the ability to meet net zero ambitions and concerns over rising costs and falling profitability.
Almost three quarters (73.5%) of the CEOs surveyed said their business costs had increased in the last year, with 46.9% reporting falling profits.
UK automotive manufacturers, like dealers, pay more for electricity than anywhere else in Europe – more than double the average – due in part to energy taxes six times higher, which added over £200 million to manufacturers’ bills last year alone.
The SMMT said rapid implementation of the reforms to industrial energy costs set out in the government Industrial Strategy published yesterday would cut the sector’s electricity bill by a fifth, helping ease this structural disadvantage.
It said more than half (52%) of CEOs believing the UK is significantly behind track to meet the 2030 end of sale date for new cars powered solely by combustion engines.
It added that consumer demand had been further damaged by governmental disincentives such as the VED Expensive Car Supplement (ECS), estimated to impose an effective fine of more than £360 million on EVs bought from April this year.
Hawes made the comments as the government published its industrial strategy.
Mike Hawes, SMMT Chief Executive, said: “We welcome the Government’s Industrial Strategy, a 10-year plan which answers our call for a long-term commitment to automotive manufacturing.
The UK automotive industry has pledged to build on the foundations laid by government’s landmark Industrial Strategy – published yesterday – with a 10-point plan to propel the UK back into the top 15 of global vehicle manufacturing locations by 2030 and deliver a £50 billion economic boost over the next decade.
“With action to reduce electricity costs, upskill workers and unlock finance, it lays the foundation on which we can build our future. We now need to see the Strategy implemented and at pace, because competitors will move fast so our window of opportunity will not remain open for long. The prize, however, in terms of jobs, innovation and economic growth – green growth at that – is worth the investment.”