A major body representing the UK car industry has called on the government to take “rapid action” that will “secure the future” of the sector while accelerating decarbonisation. The Society of Motor Manufacturers and Traders (SMMT) says changes to import and export rules in 2024 mean the government needs to step in quickly as the sector recovers from the coronavirus pandemic.

Since the pandemic began in 2020, the car industry has suffered at the hands of staff and material shortages, causing a downturn in sales and production compared with pre-pandemic levels. Nevertheless, the SMMT expects the new car and van market to grow by 15 percent next year, feeding an extra £10 billion into the UK economy.

By the same token, the SMMT also expects easing semiconductor shortages to help boost UK vehicle factory output by 15 percent, injecting a further £3.9 billion into the economy. Overall, therefore, the SMMT estimates the growth of the industry to be somewhere in the region of £14 billion to the economy, and it expects that to increase to almost £30 billion if there’s further growth in 2024.

Nissan LEAF production in Sunderland, UK

However, the SMMT points out that the sector is expected to come under pressure from economic instability, trade protectionism and regulatory change, as well as a cost of living crisis, skills shortages and soaring energy costs. And in 2024, the EU-UK Rules of Origin will become tougher, threatening tariff-free trade for vehicles, while the UK government’s own Zero Emission Vehicle Mandate will kick in.

To ensure the sector can grow despite the challenges, the SMMT has called for a “targeted government action plan” to safeguard the future of the industry and the “thousands” of jobs it supports. The organisation has suggested such a strategy should “help attract investment in vehicle, battery and fuel cell production”, as well as supporting electric supply chains and delivering infrastructure “critically needed” for electric vehicle uptake.

2021 MG ZS EV parked shot with charging cable

“In the most testing of times, growth finally beckons for the UK automotive industry, and as recession looms, that’s growth that should be nurtured,” said the SMMT’s chief executive, Mike Hawes. “We need a framework that enhances competitiveness, enables investment and promotes UK Automotive’s strengths: innovation, productivity and a highly skilled workforce. We therefore need swift and decisive action that addresses the immediate challenges and gives us a fighting chance of winning the global competition. That window of opportunity is open but is closing fast.”