The UK automotive industry today has vowed to build on the foundations laid by government’s Industrial Strategy published yesterday with a 10-point plan to drive the UK back into the top 15 of global vehicle manufacturing locations by 2030 and deliver a £50 billion economic boost over the next decade. [See footnote 1] This is from the home of the Brexit disaster of British political thinking.*
Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT)** speaking at the industry’s annual Summit in London today said, “Government’s long-term Industrial Strategy, including the Drive35 £2.5 billion auto capital and R&D fund, recognizes automotive as a pillar of advanced manufacturing, integral to the world leading innovation that creates the high value jobs, wealth and economic growth that are vital to our country’s future. Now we must make the most of that position and put in place the right conditions for growth.”
The strategy or lobbying blather comes as a new SMMT report, The Competitive Edge: Driving Long-Term UK Automotive Growth is published. The report, which features SMMT’s first UK Automotive Business Leaders Barometer, charts the industry’s fundamental strengths and potential, with more than half of businesses having recently secured, or planning for, investment. However, it also uncovers low confidence in global trading conditions and doubts about the ability to meet net zero ambitions, amid rising costs and falling profitability.
Highlights and Lowlights of The Competitive Edge
- Almost three quarters (73.5%) of the CEOs surveyed said their business costs had increased in the last year, with 46.9% reporting falling profits. [2]
- The sector also faces some of the world’s toughest market regulation and compliance costs – factors which must be addressed urgently to create a level playing field that anchors existing investors and creates the right conditions for further growth.
- UK automotive manufacturers pay more for electricity than anywhere else in Europe – more than double the average – due in part to energy taxes six times higher, which added more than £200 million to manufacturers’ bills last year. [3]
- Rapid implementation of the reforms to industrial energy costs set out in the Industrial Strategy would cut the sector’s electricity bill by a fifth, helping ease this structural disadvantage. To level the playing field, however, the proposed relief on standing charges, which will apply to battery manufacturing, should also benefit automotive manufacturing, given the sector will become more electricity-dependent as it increasingly builds EVs.
- Current uncompetitive production costs must also be set alongside uncompetitive market costs. Manufacturers have incurred a £6.5 billion electric vehicle incentives bill over the last 18 months to shore up EV demand that “remains stubbornly behind mandated government targets, with more than half (52%) of CEOs believing the UK is significantly behind track to meet the 2030 end of sale date for new cars powered solely by combustion engines.” [4]
- Consumer demand has been further damaged by governmental disincentives such as the VED Expensive Car Supplement (ECS), estimated to impose an effective fine of more than £360 million on EVs bought from April this year. [5]
“Bold government action to drive up demand for the electric vehicles which manufacturers are compelled to sell is essential, requiring a package of consumer support measures, including amendments to the ECS and cuts to VAT on new EVs and public charging. This would help deliver a vibrant domestic market which is not just a leader in decarbonisation but in affordability,” SMMT said.
*AutoInformed on
**The Society of Motor Manufacturers and Traders (SMMT) represents the automotive industry in the UK. SMMT says the auto industry is vital part of the UK economy, integral to growth, the delivery of net zero and the UK as a global trade hub. It contributes £93 billion turnover and £22 billion value added to the UK economy, and invests ~£4 billion each year in R&D. With ~198,000 people employed directly in manufacturing and ~813,000 across the wider automotive industry. Many of these automotive manufacturing jobs are outside London and the South-East, with wages that are a~3% higher than the UK average. The sector accounts for 13.9% of total UK exports of goods, with UK-produced vehicles traded globally, generating £115 billion in total automotive imports and exports.
The UK manufactures almost every type of vehicle, from cars, to vans, taxis, trucks, buses and coaches, as well as specialist and off-highway vehicles, supported by more than 2500 component providers and their engineers. In addition, the sector has aftermarket and remanufacturing industries. The automotive industry also supports jobs in other key sectors, including advertising, chemicals, finance, logistics and steel.
Inevitable SMMT Footnotes
- SMMT analysis in The Competitive Edge: Driving Long-Term UK Automotive Growth
- SMMT analysis – UK Automotive Business Leaders Barometer 2025 – a survey of CEOs and MDs undertaken between April and May 2025, with more than 50 respondents representing businesses with a combined £79 billion turnover and 87,000-strong workforce – representing 98% of UK vehicle production. 35% of respondents were vehicle manufacturers, 40% supply chain businesses and 25% other auto companies.
- SMMT Sustainability Report 2024.
- Based on AutoTrader data on EV discounts, JATO sales weighted recommended retail price data and SMMT EV market data and own estimates of fleet discounts.
- SMMT analysis.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn.
He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe.
Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap.
AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks.
Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
SMMT Lauds Launch of UK Industrial Strategy
The UK automotive industry today has vowed to build on the foundations laid by government’s Industrial Strategy published yesterday with a 10-point plan to drive the UK back into the top 15 of global vehicle manufacturing locations by 2030 and deliver a £50 billion economic boost over the next decade. [See footnote 1] This is from the home of the Brexit disaster of British political thinking.*
Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT)** speaking at the industry’s annual Summit in London today said, “Government’s long-term Industrial Strategy, including the Drive35 £2.5 billion auto capital and R&D fund, recognizes automotive as a pillar of advanced manufacturing, integral to the world leading innovation that creates the high value jobs, wealth and economic growth that are vital to our country’s future. Now we must make the most of that position and put in place the right conditions for growth.”
The strategy or lobbying blather comes as a new SMMT report, The Competitive Edge: Driving Long-Term UK Automotive Growth is published. The report, which features SMMT’s first UK Automotive Business Leaders Barometer, charts the industry’s fundamental strengths and potential, with more than half of businesses having recently secured, or planning for, investment. However, it also uncovers low confidence in global trading conditions and doubts about the ability to meet net zero ambitions, amid rising costs and falling profitability.
Highlights and Lowlights of The Competitive Edge
“Bold government action to drive up demand for the electric vehicles which manufacturers are compelled to sell is essential, requiring a package of consumer support measures, including amendments to the ECS and cuts to VAT on new EVs and public charging. This would help deliver a vibrant domestic market which is not just a leader in decarbonisation but in affordability,” SMMT said.
*AutoInformed on
**The Society of Motor Manufacturers and Traders (SMMT) represents the automotive industry in the UK. SMMT says the auto industry is vital part of the UK economy, integral to growth, the delivery of net zero and the UK as a global trade hub. It contributes £93 billion turnover and £22 billion value added to the UK economy, and invests ~£4 billion each year in R&D. With ~198,000 people employed directly in manufacturing and ~813,000 across the wider automotive industry. Many of these automotive manufacturing jobs are outside London and the South-East, with wages that are a~3% higher than the UK average. The sector accounts for 13.9% of total UK exports of goods, with UK-produced vehicles traded globally, generating £115 billion in total automotive imports and exports.
The UK manufactures almost every type of vehicle, from cars, to vans, taxis, trucks, buses and coaches, as well as specialist and off-highway vehicles, supported by more than 2500 component providers and their engineers. In addition, the sector has aftermarket and remanufacturing industries. The automotive industry also supports jobs in other key sectors, including advertising, chemicals, finance, logistics and steel.
Inevitable SMMT Footnotes
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn. He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe. Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap. AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks. Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.