2023-12-28 19:51:11
There is a collective sigh of relief across the English car industry. After difficult years, 2023 brought the longed-for recovery – at least to some extent. The factories on the island probably produced a little more than a million cars, vans and minibuses, around 18 percent more than in the previous year, estimates the industry association SMMT (Society of Motor Manufacturers and Traders).
That’s an improvement, but still not a really good value. Because 2022 was the worst year in more than six decades for the car industry on the island because the chip shortage after the Corona crisis temporarily paralyzed vehicle production. The number of vehicles manufactured fell to an all-time low of just 775,000 and lamentation over the decline was loud.
In 2023, these bottlenecks will disappear. “British car production is well back on track after the tough Covid years and the resulting supply chain difficulties,” says SMMT boss Mike Hawes. According to preliminary estimates, production of cars alone this year could have been just over 900,000. For comparison: the German car industry is more than four times larger. The industry association VDA raised its forecast in the summer and expects production volumes to grow by 15 percent to 4 million car units in Germany. Even if Britain is far from being able to keep up with this, the industry there is still considered important for the country.
Nissan is investing £2 billion
Three out of four cars manufactured on the island are intended for export, predominantly for the European market. Only recently there was a threat of introducing tariffs of 10 percent on electric cars from January. After all, this sword of Damocles has now been averted for the next three years thanks to an agreement with the EU Commission. The stricter country of origin rules in British-European trade will only take effect from 2027. This is a relief for the British manufacturers for the time being. Some had warned that otherwise they would have to close factories. The share of purely battery-powered electric or hybrid vehicles in total production has now risen to 38 percent, the industry association announced.
The industry can also look forward to significant investment commitments. “The automotive industry has raised over £20 billion in investment over the course of 2023 – more than in the previous seven years combined,” said SMMT boss Hawes shortly before Christmas. After the Brexit vote in 2016, investments initially collapsed, but are only now coming back strongly. Stellantis manager Alison Jones said of the UK’s investment record over the past year: “We have seen large commitments in battery production, lithium mining, vehicle manufacturing, research and development and the consumer market.”
Ban on combustion engines postponed
The largest commitments for billions in investments came from Jaguar Land Rover (JLR) and the Indian parent company Tata. Tata is building a so-called gigafactory for electric car batteries with 40 gigawatt hours of production capacity in the western English county of Somerset for more than 4 billion pounds.
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Nissan is investing £2 billion in new investment to expand its factory in Sunderland, northern England, to produce two new electric models. The Munich-based BMW Group has announced £600 million of investment for the mini factory in Oxford to transform it into an all-electric car factory by 2030. Production of two new electric models will start in 2026. Ford announced a low three-digit million sum for its British factories just over a year ago. Stellantis, Bentley and Lotus are also investing.
The London government has meanwhile increased state funding. Economics Minister Kemi Badenoch has announced that she wants to strengthen “strategic industries” on the island with grants and subsidies. But she wants to avoid a “distorting subsidy battle”.
Around 300,000 public charging points by 2030
Of the £4.5 billion fund, which was increased at the end of November, £2 billion is to flow into the car industry and particularly into the conversion to electric mobility. However, there are still many problems here. Outside London, the charging infrastructure for electric cars is still very patchy. Around 700,000 car owners have installed private charging points in their straight lines or parking spaces. The number of public charging stations grew to 53,000 at the end of November, 46 percent more than a year earlier. Shell, Pod Point and BP Pulse are the private market leaders, which together operate around a third of the charging points.
The government wants to have built around 300,000 public charging points by 2030 – this will be supported with half a billion pounds of tax money. Nevertheless, resistance to switching to electric vehicles is still strong among many private individuals. Many are hesitant because of fears of higher costs, limited ranges and charging difficulties. With the transition still slow, Prime Minister Rishi Sunak has pushed back the start of the ban on new petrol and diesel vehicles from 2030 to 2035.
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