The UK automotive sector must be included in a Made in Europe framework to protect competitiveness, supply chains and future EV investment, argues professor Jim Saker, president of the Institute of the Motor Industry.
On many occasions I have felt that the SMMT has been soft in protecting the UK car industry against outside players such as China. Chinese cars are allowed to be sold in the UK without any real investment into manufacturing in this country. Something that the Chinese insisted on when it came to foreign car makers selling in their market.
There is one argument that I totally back Mike Hawes and the SMMT over and that is that the EU should amend its proposed Industrial Accelerator Act (IAA) to ensure the UK automotive sector remains a recognised ‘Made in Europe’ partner.
The case for Made in Europe status
The argument for the UK motor industry being part of an EU-style “Made in Europe” scheme is mainly economic, and supply-chain driven rather than political branding. It rests on how deeply integrated despite Brexit the UK automotive sector is with the rest of Europe.
The UK supply chains have remained heavily embedded in Europe with components crossing borders multiple times. A “Made in Europe” label reflects this reality better than a strict national label, because production is genuinely multinational.
Being part of a broader ‘European’ manufacturing identity would help the UK meet its role under trade legislation such as the EU–UK Trade and Cooperation Agreement where vehicles must meet “rules of origin” thresholds (e.g. a certain percentage of local content) to qualify for tariff-free trade. It will also help to keep UK built cars competitive in European markets.
Significantly being part of a broader “European” manufacturing identity could help prevent UK vehicles from being perceived as being ‘third country’ good and help to reinforce consumer trust in quality and standards. This is important as the EU remains the largest export destination for UK built cars.
Reducing uncertainty for manufacturers
With major car manufacturers operating a single production eco-system a ‘Made in Europe’ framework would encourage continued investment in UK plants and reduce uncertainty for multinational manufacturers.
The final element is that with the shift to EVs it is important that the UK has access to European activity with respect to battery materials and gigafactories as we are badly behind in this area.
The Prime Minister has been criticised for moving closer to Europe by trying to mirror some of the systems and processes to cut done on bureaucratic paperwork. The ‘Made in Europe’ designation would be a major coup if this could be achieved. It would improve the efficiency of the UK’s supply chain and reinforce the cost effectiveness of production in the UK.
Brexit tensions remain unresolved
It is strange that it is just over 6 years since the UK officially left the EU and we are still trying to get back to a position whereby we can work together efficiently. What I don’t understand is why the people who were instrumental in causing this chaos are still regarded as serious players in UK politics.
Author: Professor Jim Saker, president of the Institute of the Motor Industry.
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