Competitiveness is key to manufacturing recovery

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There was some much needed clarity this week with the Prime Minister outlining a roadmap out of lockdown driven by the successful vaccination programme and falling infection rates. With almost a year having passed since the country first went into stasis a return to normality is tantalisingly close. Nevertheless, the fact that retail showrooms must remain closed, until April at least, is deeply disappointing given these facilities are Covid-secure, large premises with low footfall and able to operate on an appointment-only basis.

Whilst “click and collect” can continue, this does not replace the showroom experience and, unfortunately, the continuing decline in retail business will translate into reduced production volumes as well as giving rise to other operational issues. Indeed, showroom closures, along with global supply chain issues, extended shutdowns and friction in the new trading arrangements following the end of the Brexit Transition period all conspired to send January UK car production down -27.3% to 86,052 units, the worst since 2009. Production of commercial vehicles and engines also both decreased by -31.5% and -29.3% respectively.

With the Chancellor outlining his new Budget next week, now is the time to announce measures that will enhance UK automotive manufacturing competitiveness to help anchor vehicle production here. This means an extension of Covid-19 business support schemes including the CJRS furlough, amendments to business rates reform in order to incentivise manufacturing investment and more support for skills and training.

Upskilling our industry and providing training is crucial as new technologies transform the sector and so this week SMMT was delighted to sign the Armed Forces Covenant in partnership with Mission Motorsport and supported by the Ministry of Defence. The veteran community is already a real asset to the automotive sector and will be central not just to a successful and sustainable recovery but to our future success as we transition to a connected, autonomous and zero emissions future. We need to do more to provide ex-service people with a route into the industry as their skills are much-needed.

Finally, the announcement confirming that E10 petrol will be available for motorists from this September is another step towards the 2050 net zero target. Its introduction is significant in that it assists with the decarbonisation of the existing UK car parc as well as those new cars powered by petrol engines.

Vehicle manufacturers have been preparing for its introduction for many years so drivers can be reassured that it is compatible with most cars currently on the road. Together with the introduction of new electrified vehicles, the range of which is accelerating rapidly, this new fuel will help reduce the overall emissions of road transport long into the future.

The post Competitiveness is key to manufacturing recovery appeared first on SMMT.

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