Progress in Britain’s fast-expanding car sector could be halted if trade deals aren’t made

The UK’s specialist and low-volume vehicle industry has surged in value by 52% in five years – but experts warn a bad Brexit deal could put the brakes on progress.

Output of Britain’s low-volume car makers, which collectively employ 11,250 people, has grown by 25% since 2012, increasing the sector’s contribution to the economy to £3.2 billion.

Figures released by the Society of Motor Manufacturers & Traders (SMMT) show that a continuation of this could see annual production reach 52,000 vehicles in 2020, a growth of 60% on today.

But SMMT CEO Mike Hawes has highlighted the sensitivity of Britain’s low-volume sector during Brexit negotiations, stating that a good deal for trade will be vital to prevent one of Britain’s greatest industries from being held back.

“Our specialist car manufacturing sector is one of the UK’s global success stories – making world-leading products and pioneering next-generation technologies that benefit everyone,” he said.

“For this to continue, we need certainty on Britain’s future trading relationships, including customs plans, market access, regulations governing the design, production and approval of vehicles, and rules around movement of skilled workers.”

Britain’s low-volume car manufacturers – comprising supercar makers such as McLaren, luxury companies such as Rolls-Royce, the recently relaunched TVR and sports car brands including Lotus – have pushed the sector’s exports to represent 65% of sales. Meanwhile, 30% of components used in the sector’s cars are sourced from the European Union.

“This event isn’t just about telling the world about the importance of our sector, it’s about doing what we can to educate the politicians about what we’ll need in the future," John Chasey, operations director at TVR said. "We want the car we create to be compliant in as many regions as possible, but if some of the derogations that provide the structure are lost in the Great Repeal Bill, it’ll get a lot more difficult."

Hawes, whose organisation represents the UK car industry, has called on the Government to set out the best regulations to ensure trade barriers and tariffs aren’t introduced.

“This will provide the assurance the sector needs to remain competitive and make investment decisions that enable it to continue to develop innovative, exciting and desirable products that are the envy of the world,” Hawes explained.

Simon Wood, chief technical expert at Lotus Cars added that regulators will also have to consider legislation around autonomous vehicles. He said “I don’t have any fear for our industry from the effects of hybridisation or electrification at all. The bigger threat could be autonomous driving, and how the legislation that promotes it is framed. If road systems were only configured for autonomous that’d be pretty bad."

McLaren has cemented itself as one of the UK’s low-volume car sector success stories. The brand celebrated a record-breaking 2016 when sales reached 3286 units. The Woking car maker made £9.2 million, a rise of 70% on the previous year.

The brand's vehicle line director, Andy Palmer, believes the road ahead also represents opportunity. He said “These challenges we face are something we haven’t seen before. The challenge to provide something very different for the future is huge. That makes our industry an amazingly exciting place to be. Bring it on!"

In addition, the industry has just seen the rebirth of TVR, which is building a production facility in Wales and plans to launch the Griffith sports car. Aston Martin is also rapidly increasing its assets with a new Welsh plant and is producing a 1000bhp hypercar called the Valkyrie as a new halo model.

Additional reporting by Steve Cropley

More content:

Car servicing costs to rise by 10% if no Brexit deal is made

Lotus CEO: sports car production stays in Norfolk

Join the debate

Comments
11

17 October 2017

UK companies should adjust their company operations now to be ready for EU tariffs and EU rules for exporting goods to the EU.

The transition period is 24th June 2016 to March 2019. Companies must be ready for March 2019.

17 October 2017
max1e6 wrote:

The transition period is 24th June 2016 to March 2019. Companies must be ready for March 2019.

They will be.  I am sure they are now, as we I type eyeing up locations within the EU in which to relocate their operations and make the transition as seemless as possible.

17 October 2017

Where are the UK car manufacturers going to go?!

There won't be an EU once the UK has left.

18 October 2017
max1e6 wrote:

There won't be an EU once the UK has left.

 

ROFL...

17 October 2017

Surely the UK low-volume car sector is all "niche" luxury/sport/specialist vehicles that sell for premium prices to mostly markets outside the EU. Hence if no deal is done with the EU, & we resort to WTO rules, any price increase will only make these cars only more desirable to wealthy buyers?

We don't sell many luxury vehicles to France or Italy do we? ( & definitely almost none to Spain, Poland & Slovenia & the others)

Maybe we sell a few more to Germany because they're a bit more wealthier but most Germans would buy their home grown luxury cars.

Also if there is an "Hard Brexit", the Pound will plummet & the price of importing Engines from the EU would be offset by very cheap labour & production costs in the UK.

17 October 2017

The pound will not 'plummet'. Its value has changed because of uncertainty and because certain people are using their financial power to affect the exchange rate to try to put us off leaving the EU.

The UK should leave the EU today with no negotations and no exit payment. End the uncertainty and move forward.

There won't be an EU after the UK has left. The Euro currency will collapse.

17 October 2017

I cannot believe just how delusional Brexiteers are. You're talking complete crap. Volume car manufacturing in the UK is about to start dying a slow death. That is, IF Brexit does go ahead.

There are ALREADY decisions being made about shifting production to the EU, so it is already starting to lose out. Brexit will accelerate that.

"British" car brands are already made abroad to a degree, witness Mini, Jaguars and Land Rovers. This will only increase over time. They have to build 'in market' to ensure profitability, exporting from the UK into China for example means that customers are footing the high import tariffs and being disuaded.

Other volume manufacturing plants in the UK, like Nissan are put at risk by Brexit. They're working with less profit margin. It wouldn't take much money, or time, for them to invest in a Eastern European plant, where labour rates are lower and where the supply chain is already based. A lot of those Hyundais and Kias you see on the roads are from Czech and Slovakia, you know.

If you consider the top 10 best selling cars in the UK, mostly Fords, Vauxhalls, VWs, Mercedes made outside of the UK. UK car buyers do not care for where a car is made. 

The industrial catastrophe that Brexit will wreak on the UK, will be the fault of all of those that voted for it. 

18 October 2017
autoindustryinsider wrote:

......

If you consider the top 10 best selling cars in the UK, mostly Fords, Vauxhalls, VWs, Mercedes made outside of the UK. UK car buyers do not care for where a car is made. 

...

Yep Ford will take production of our best selling Fiesta, Escort, JLR will take production out to out to mainland Europe too if we leave the EU.

What do mean they done that already with funds from the EU (i.e. from the UK taxpayer)

 

Hydrogen cars just went POP

18 October 2017
max1e6 wrote:

The pound will not 'plummet'. Its value has changed because of uncertainty and because certain people are using their financial power to affect the exchange rate to try to put us off leaving the EU.

The UK should leave the EU today with no negotations and no exit payment. End the uncertainty and move forward.

There won't be an EU after the UK has left. The Euro currency will collapse.

 

stop stop.... i can't laugh anymore , it hurts

17 October 2017

Yes, bring on all those 'the end is nigh' predictions.  After all, the last lot of 'sky-will-fall' silliness worked out so well after June 23rd, didn't it?  I seem to remember a particular gimp called George Osborne making these predictions.  Now, whatever happened to gorgeous George?

Pages

Add your comment

Log in or register to post comments

Find an Autocar car review

Driven this week

  • Volvo XC40 cornering
    First Drive
    21 November 2017
    Volvo’s XC40 arrives in the premium compact SUV segment and hits the right note with design, practicality and driving style
  • Jaguar E-Pace P300
    First Drive
    19 November 2017
    Jaguar’s second SUV faces up to the Audi Q3, BMW X1 and Mercedes-Benz GLA. Tough task, so is the E-Pace up to it?
  • Jaguar E-Pace D180
    First Drive
    19 November 2017
    Not the driver’s car many would hope from any car wearing the Jaguar badge, but the E-Pace is an attractive and interesting addition to the compact premium SUV ranks
  • Subaru Impreza
    First Drive
    17 November 2017
    The fifth-generation Subaru Impreza is much improved from top to bottom, but a poor engine and gearbox keep it trailing in this competitive class
  • Ford Fiesta Vignale
    First Drive
    17 November 2017
    We get a first taste of Ford’s poshest Fiesta in turbocharged diesel form