UK car production hits record high
【Summary】UK car manufacturing had a bumper month in September, with a 40% increase in production compared to last year. Both domestic and export markets saw growth, with the UK seeing a 65.9% increase in production and overseas shipments rising by 32.2%. However, there are concerns about the impact of new rules of origin for batteries on the competitiveness of UK exports to the EU and EU imports to the UK market.
In September, UK car manufacturing experienced its strongest month of growth this year, with a nearly 40% increase, according to the Society of Motor Manufacturers and Traders (SMMT) (i). This positive trend is particularly significant for the UK economy, as it supports thousands of jobs and attracts billions of pounds in investment.
During September, a total of 88,230 vehicles were produced in British factories, marking a 39.8% increase and the best September performance since 2020. Both domestic and export markets saw an increase in output, with UK production rising by 65.9% to 23,503 units and overseas shipments growing by 32.2% to 64,727 units.
With the growing importance of electric vehicle (EV) trade, especially with mainland Europe, the SMMT emphasized the need to maintain tariff-free trade as outlined in the UK-EU Trade Cooperation Agreement (TCA). Starting from next year, stricter rules of origin for batteries will be implemented, posing a threat to the competitiveness of UK exports to the EU and EU imports to the UK market. Failure to comply with these rules would result in a 10% tariff, potentially raising the average cost of UK-built battery electric vehicles (BEVs) by £3,600 in Europe and increasing the price of EU-made BEVs sold in the UK by £3,400.
The SMMT suggested that a three-year delay in implementing the new requirements would help maintain competitiveness and support British and European manufacturers. This delay could be achieved within the existing TCA framework without the need for formal renegotiation.
Andrew Whicher, Product Director at Cooper Solutions, expressed optimism about the strong performance of UK car manufacturing in September. He highlighted the increasing production of electric vehicles in the UK, positioning the country as a leading EV manufacturing hub, particularly for EU countries which are Britain's key trading partners.
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