The Society of Motor Manufacturers and Traders (SMMT) is pressing Japanese automakers to boost their investment levels in the United Kingdom. Mike Hawes, CEO of SMMT, highlighted the potential for such investments to stimulate further economic activity from suppliers and bolster the UK auto sector.
Speaking with Kyodo News in Tokyo, Hawes emphasized the necessity for automakers to upgrade manufacturing facilities or expand capacity to stay competitive. This appeal comes as the UK, a key export hub to the European Union, grapples with auto production levels that hit a 66-year low in 2022 due to chip shortages, pandemic-induced supply chain disruptions, and Honda’s Swindon plant closure.
Despite Honda’s exit, Japanese manufacturers Nissan and Toyota remain major players in the UK, ranking among the top four largest auto producers. Japanese brands collectively hold a 15% share of the British car market. Hawes lauded the efficiency of Nissan and Toyota’s UK plants while underscoring the ongoing challenge of maintaining and enhancing their competitive edge.
The UK’s aggressive carbon reduction goals are also a critical factor. The country aims for all new vehicles to be zero-emission by 2035, a target that the newly elected Labour government under Prime Minister Keir Starmer plans to accelerate to 2030. This shift proves the urgency for manufacturers to invest in electric vehicle (EV) production.
Nissan’s response included a £2 billion ($2.5 billion) investment to boost EV production at its Sunderland plant. Hawes expressed optimism that this move would encourage other Japanese firms, including auto parts suppliers, to invest in the UK, thereby fortifying local supply chains.
Yet, not all manufacturers share this optimistic outlook. Stellantis N.V., the parent company of Vauxhall, Peugeot, and Citroen, has warned that its plants in Ellesmere Port and Luton might face closure unless market demand for EVs rises and the British government’s EV sales quotas are relaxed.
The recent decision by the European Union to impose provisional tariffs on Chinese-built EVs adds another layer of complexity. Hawes noted that SMMT is closely monitoring the potential repercussions of this move on the UK market.
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