SMMT chief urges 'ambitious free trade agreement' with EU

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On the eve of the UK leaving the EU, the head of SMMT is urging Brexit negotiators to deliver ‘an ambitious free trade agreement with Europe’.

free trade
Image: Nissan

Mike Hawes, chief executive of SMMT, the UK’s automotive trade body, made the appeal on the publication today (January 30, 2020) of figures showing a 14.2 per drop in car production in 2019.

The drop to 1,303,135 units has been attributed to factors including weakened domestic consumer and business confidence, weaker demand from overseas markets, model production changes, and less appetite for diesel models.

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SMMT said also that factory closures - timed to mitigate disruption arising from the anticipated departure from the EU on 29 March and 31 October - had a ‘marked effect’.

A total of 247,138 vehicles were made for the home market in 2019, a year-on-year fall of 12.3 per cent, whilst cars made for export fell 14.7 per cent to 1,055,997 units.

Image: SMMT

Shipments to the EU fell 11.1 per cent but remains the sector’s most important market, with SMMT adding that trade with the UK’s next largest markets, the US (18.9 per cent of exports), China (5.3 per cent) and Japan (3.2 per cent) also fell, with exports down 9.8 per cent, 26.4 per cent and 17.7 per cent respectively.

Production from the small volume car manufacturing sector saw growth of 16.2 per cent, and alternatively fuelled cars continued their upward trajectory to 192,304 units, a rise of by 34.7 per cent.

“2020 could prove the year of the electric vehicle,” said Stuart Apperley, regional director, transport at Lloyds Bank Commercial Banking. “A raft of new models will offer a wider range of more affordable options for consumers, while Tesla’s rapid rise to become the world’s second most valuable carmaker should prompt others to invest in their electric and hybrid offerings.”

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free trade
Image: SMMT

After January 31, 2020, the UK will have 11 months to negotiate a free trade agreement with the EU, which took delivery of 54.8 per cent of Britain’s automotive exports, led by the Nissan Qashqai, MINI Hatch and Toyota Corolla.

In a statement, Hawes, said: “The fall of UK car manufacturing to its lowest level in almost a decade is of grave concern.

“Given the uncertainty the sector has experienced, it is essential we re-establish our global competitiveness and that starts with an ambitious free trade agreement with Europe, one that guarantees all automotive products can be bought and sold without tariffs or additional burdens.

“This will boost manufacturing, avoid costly price rises and maintain choice for UK consumers. Negotiations will be challenging but all sides stand to gain and this sector is up for it.”