Investment Pressure: Growth and the UK Motor Industry

The UK’s automotive industry is one of its biggest success stories. UK industry and manufacturing is world-renowned, and the continued manufacture of vehicles on British soil has been testament to the continuation of a tradition. But in the aftermath of the UK’s departure from the EU, the story has changed a little – and both the United States and European Union are weighing in.

Pressure from Global Partners

The UK motor industry has faced numerous challenges in recent years, from declining production volumes to rising redundancy and unemployment figures within the industry. In 2021, car production had fallen 34% below levels in 2019, with numerous touted causes. For one, the coronavirus pandemic impacted factory production schedules; for another, the rise of EVs ate into the market share of major manufacturers.

The second-hand industry has remained viable, but also somewhat suffered for the decline in the automotive industry as a whole. Used cars remain a cheaper and more accessible option for people in the UK, but their price had begun to creep up in response to international shortages of new stock. In 2023, pressure has been increasing from global partners in the EU and United States, in hopes of stimulating national investment in the automotive industry.

The Need for Investment

But why the push for investment? The global demand for electric vehicles is continuing to grow, with zero-emissions targets held by all major nations in the West. The UK motoring industry needs to keep up with new EV developments and trends, including new technology, infrastructure and charging points; investment is necessary not only to create jobs and help achieve the net-zero targets, but to ensure that the UK motor industry can continue to compete in the global market.

Investment Examples

The UK was responding to this need as early as December 2021, when the government announced a £49 million investment into the automotive industry to fund new technology and create jobs in the sector. There were also numerous potential contracts with international manufacturers and plants to stimulate the national economy, with emerging businesses like Britishvolt building a factory in the North of England to meet new demand for EV battery cells.

Meanwhile, Nissan was also due to invest in its Sunderland plant to produce the new Ariya electric vehicle – before making a statement of their own to pressure the UK into re-stimulating the automotive economy, with suggestions that poor financial support could lead to the scrapping of UK production runs.

The UK automotive industry remains a bright light in Europe and the wider West, but falling investment and falling expenditure, alongside an ailing economy, are becoming causes for concern – not only for profitability, but also for the fight against climate change.