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Shoosmiths’ mobility head, Jonathan Smart, was a speaker at the SMMT International Automotive Summit 2023, hosted in London. Jonathan moderated a panel discussion focused on the competitive challenges facing the UK’s automotive manufacturing sector.

 

The summit was aimed at addressing the challenges facing the automotive sector, including building resiliency, international collaboration, unlocking potential, competitiveness and innovation.

Attended by more than 300 representatives from across the automotive industry, including vehicle manufacturers, component manufacturers, the aftermarket and government, the summit explored these focus areas and how they fit as part of a dedicated industrial strategy to help the automotive industry transition to a zero-emission future.

Richard Blatchly, principal associate and automotive specialist at Shoosmiths, provides his key takeaways from the summit:

1. A Green Automotive Transformation Strategy
   
   There was a call for the government to reassure the UK automotive industry that what it offers will be protected.
   
   As the sector consolidates its post-pandemic recovery - growing new vehicle registrations, production output and manufacturing jobs - it faces competition in its transition to zero emission mobility as other countries accelerate their efforts to secure international investment by offering incentives and subsidies to attract green manufacturing. To counter this, the SMMT encouraged the government to ‘supercharge’ the UK automotive industry by adopting a strategy that ‘enables innovation, attracts investment and secures the manufacturing of clean technologies’ whilst also ensuring that there is an aftermarket ready and able to serve it.
2. Net zero for all
   
   It was stressed that the UK needs a reliable and affordable recharging and refuelling network.
   
   Discussions focussed on the potential impact of implementing binding targets, and introducing a motor tax and regulatory system that better supports the transition to net zero. However, it was made clear that any such targets must be achievable, and that the infrastructure must be both affordable and accessible for all consumers.
3. Green skills
   
   Skills shortages were highlighted as a key challenge facing the industry - with significant barriers to entry, a lack of incentivisation and understanding of the wider sector.
   
   To address this, the SMMT proposed ‘creating a one-stop shop national upskilling platform’, to develop the future talent that business needs, combined with greater STEM education in schools and a dynamic immigration system that attracts global talent.
   
   With mobility rapidly evolving and the ‘car’ set to become one of the most advanced pieces of technology that people will own or use, opportunities within the automotive industry are steadily increasing, and the key message to take away was encouraging the transition to a model whereby ‘if you can see it, you can be it.’
4. Market access
   
   Delegates heard how the growth of the UK automotive industry is contingent on British plants attracting the next generation of electric models and scaling up the electric vehicle (EV) supply chain.
   
   The ‘Rules of Origin’ provisions, as set out in the UK-EU Trade and Cooperation Agreement and due to come into force in early 2024, were cited as posing a challenge to this and to the industry more generally.
   
   If not addressed, it was argued that resulting tariffs would make British-built EVs less competitive in key export markets, whilst also pushing up prices for British buyers.
5. Clean tech
   
   The SMMT’s recent automotive business confidence barometer indicated that more than 80% of companies are experiencing rising input costs - limiting profitability and acting as a brake on investment, despite an increase in orders and output.
   
   Competitive energy prices are critical to long-term domestic EV production, with more than nine-in-ten firms also citing the importance of energy price mitigation measures as essential to further investment.

Unleashing its Potential

While the summit identified the challenges facing the UK automotive industry, many of those attending and speaking were united in the belief that the industry also has huge potential.

The directions for the future set out at the summit and in SMMT’s Manifesto 2030, if supported and acted upon, could provide an ambitious ‘route map’ to achieving a strong and resilient UK economy, with the automotive industry remaining a real jewel in its crown.

 

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