Brexit24

Free trade between EU & UK “vital” for successful car industry

UK car car production driven by exports is at a 17-year high. But demand at home is falling. So yes, free trade with the EU is vital for the UK.


UK car manufacturing has had its best month in 17 years with car makers producing 170,691 vehicles in March. Compared to last year, car production is up by 7.6% in the first quarter. The figures released by car industry body, SMMT, show the boost clearly driven by exports, which rose by 11.5%, whilst demand at home actually fell by 4.3%.

The Times suggests a recovering European sales market and the weak pound have both helped to push car exports. The paper adds that 77.9% of all the cars produced this year will head overseas with more than half of those going to Europe.

UK car exports – top destinations

Here’s a chart from Statista showing the distribution of cars exported from the UK in 2015, by export destination:

UK car exports by destination

It’s worth noting that of the other top countries the UK exports to, the EU already has trade deals in place with South Africa, South Korea and Israel, whilst Turkey is in Europe’s customs union. The EU will also have a trade deal ratified with Canada soon, whilst it’s currently in negotiations on a trade deal with Japan. And both Australia and the USA have said they would like to agree a trade deal with the EU ahead of the UK. Clearly, there is good reason to believe that UK exports has the potential to benefit from all these existing and potential trade deals. You can find out more about the EU’s trade deals including a map showing the state of EU trade at ec.europa.eu.

In a statement about the news, SMMT chief executive Mike Hawes said “UK car manufacturing is accelerating thanks to billions of pounds of investment committed over the past few years.” He added that as Europe was such an important export market, “it’s vial we maintain free trade between the UK and EU or we risk destroying this success story”.

Much of our output goes to Europe and it’s vital we maintain free trade between the UK and EU or we risk destroying this success story.

Mike Hates, SMMT chief executive

Meanwhile in the UK, real pay growth is slowing, inflation is continuing to rise and consumer spending is down. These figures also show people in the UK are also buying fewer British-built cars. This further underlines Hawe’s comment about just how vital free trade with the EU is to Britain’s car manufacturing industry.


Image: © 1000 Words / Shutterstock.com
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