UK auto industry boosted by single market, says SMMT

Access to the single market has made the British car industry one of the most competitive in the world, the trade's industry body said on Wednesday as it reported record turnover last year.

The Society of Motor Manufacturers and Traders (SMMT) said the sector turned over a record £71.6bn last year, a 7.3% increase from 2014, as jobs, production and vehicle sales grew. Additional value generated for the UK economy stood at about £18.9 billion, a 3.8% increase from the previous year.

It added that the single market and EU trade deals have helped attract billions of pounds of invest in the country in recent years, which delivered record productivity, job creation and growth. The body also warned the government it needed to tackle any risks cause by the decision to leave the EU.

Almost 1.6m cars were made in the UK, according to the SMMT's annual report, the highest in a decade. More than 2m commercial cars were registered last year.

SMMT chief executive Mike Hawes said the success of the industry was due “to unrestricted access to the single market, input to EU legislation to safeguard the interests of UK automotive, and the ability to recruit talent from abroad”.

“Our growth depends on certainty and continued open and reciprocal access to the 100-plus markets with which the UK automotive industry so successfully trades."

“This is not just finished cars but components, technologies and the wider automotive value chain. Any risks and uncertainty to these fundamental benefits need to be addressed head on by the UK government.”

In a March survey before last week's EU referendum, 88% of companies supported membership of the EU and 73% of small-to-medium size companies were in favour of remaining. The survey also said that a majority of the firms thought Brexit would have a negative impact on their business.

In the aftermath of the Brexit vote on 24 June, Hawes said in a statement: “Government must now maintain economic stability and secure a deal with the EU which safeguards UK automotive interests … making the UK the most competitive place in Europe for automotive investment.”

Research and development investment by the industry was £2.5bn in last year, which represents about 12% of the UK’s total research and development investment.

The sector employs 814,000 across the country, a 17,000 increase from 2014. Manufacturing jobs grew 5% to 169,000, with the average employee making over £110,000 in value-added to the economy.

The SMMT report revealed there were about 5,000 vacancies across the sector due to a skills shortage. The industry aims to invest in new talent as it recruited 825 apprentices last year, and about £255m is to be invested in jobs, machinery and product development in the next three years.

The report also said that the industry had improved its environmental performance. Last year 41% less waste was sent to landfill, water usage fell 7.6% and CO2 emissions were down 2.6% compared to in 2014.