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Simon Jack, BBC’s Business editor, reported that British car and van production in the first half of the current year has reached its lowest level since 1953, excluding the industry shutdown during the Covid-19 pandemic. Car output dropped by 7.3% in the six months leading up to June, while the closure of Vauhall’s Luton van plant contributed to a significant 45% decline in van production, as per data from the Society of Motor Manufacturers and Traders (SMMT).
The uncertainty surrounding tariffs in the US, which is the UK industry’s second-largest market, led some companies to slow down or completely halt production during the first half of the year. The US-UK tariff deal, which has now been implemented, is expected to boost confidence in the industry, and the government’s introduction of electric vehicle (EV) grants has been hailed as a move that could positively impact the sector.
Mike Hawes, Chief Executive of SMMT, expressed hope for the UK auto industry, stating that he believed the first half of the year might have been the lowest point. While a deal with the US to lower tariffs from 27.5% to 10% showed some promise, SMMT does not foresee reaching the production levels of one million vehicles by the end of the decade. Mr. Hawes highlighted the ambitious target set by the government to produce 1.3 million vehicles per year by 2035, emphasizing the need for new entrants to the UK production scene to achieve this goal.
In other news, the government’s decision to reintroduce grants of up to £3,750 for some EVs priced at or below £37,000 was met with mixed reactions. While the return of incentives that were abolished in 2022 was welcomed, there remains confusion regarding which vehicles will qualify for these discounts. The eligibility criteria will be based on the amount of carbon emitted during the vehicle and battery production, but specific thresholds have yet to be defined by the government. Despite the lack of clarity, there is anticipation for dozens of models to be eligible for the electric car grant, providing a much-needed boost for the industry and potential savings for drivers
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