Historic breakthrough for UK automotive industry

On 25 January, the Society of Motor Manufacturers and Traders (SMMT) released its latest figures. For the full year 2023, UK vehicle production reached 1,025,474 units (up 17.0% year-on-year), which is the best performance since 2019. This was partly due to the easing of the challenges posed by the chip shortage and the pandemic, as well as a historic increase in the production of electric models. Passenger car production accounted for 905,117 units and commercial vehicle production was 120,357 units. Total production of electric vehicles (EVs), plug-in hybrids (PHEVs) and hybrids rose to 346,451 units, accounting for nearly two-fifths of the total. The automotive manufacturing sector had a strong month in December, with a year-on-year increase of 20.7%, with sales of commercial vehicles achieving a high YoY growth of 80.3%.

In export markets, the UK automotive industry performed equally impressively. Overseas exports were up 17.6% on the previous year compared to the 13.7% growth in the British market. The EU continues to be the largest global market for the UK automotive industry, accounting for 60.3% of exports. USA and Mainland China are the second and third largest export markets respectively. Despite a decline in shipments to the US and Mainland China, exports to the Turkish market surged by 223.8 per cent, making Turkey the UK's fourth largest global market.

In 2023, the UK's car manufacturing industry not only made a quantum leap in terms of production, but also saw a historic breakthrough in terms of investments. During the year the UK automotive industry announced a whopping £23.7bn of private and public investment commitments, which is more than the last seven years combined. These investments will fuel sustainable growth in the UK automotive industry, create jobs across the country and drive the industry's transition to electric vehicle manufacturing.

SMM believes that the UK automotive industry and its electric vehicle sector in particular, is being challenged to strengthen the electric vehicle supply chain and realise a return on investment. With the postponement of stricter rules of origin for batteries and electric vehicles traded between the UK and the EU, if the UK is able to utilise this cushion and accelerate the development of its domestic supply chain, it would have the opportunity to further capitalise on the vast European market. The gradual exclusion of electric cars from China in Europe will also be a good opportunity for the UK to revive its automotive industry.