SMMT Update 376

Welcome

This week’s Budget contained several talking points for the automotive sector, in particular the reform of new car VED rates from 1 April 2017. We recognise that the system needs to be rebalanced to maintain tax take and increase uptake of the latest low emission technology. In fact, we commissioned a report on this very issue earlier this year in which we called for consultation with government on any review. So it was with some surprise that we learned from the Chancellor on Wednesday of radical plans to revamp the regime.

This overhaul is of significant concern to industry, with the potential to undermine the still emerging market for ultra low emission vehicles (ULEVs). While we welcome the fact that most zero-emission cars will still be exempt from VED, statistics show that plug-in hybrids and range-extenders are the principal drivers of ULEV growth. Imposing charges for these vehicles could counteract efforts being made by industry and government to tackle climate change and, to a certain extent, air quality too.

Another worrying development – one that may have a particular bearing on UK car manufacturing – was the introduction of a premium tax rate for cars with a list price exceeding £40,000. Britain is one of the world’s top manufacturers of premium cars, and placing a surcharge on these vehicles will almost certainly impact upon domestic demand and therefore production.

While the effect of the Budget on the new car market remains to be seen, for now at least, the sector continues to thrive. June’s half-year car registration figures were the highest they have ever been thanks to a raft of new product, low interest rates and attractive finance deals. The commercial vehicle market also enjoyed a record six months, while bus and coach makers too posted a positive half-year performance.

Finally, it was encouraging to note Business Secretary Sajid Javid’s ringing endorsement of the UK automotive sector in his speech on productivity this morning. This is one area in which we are truly ahead of the game in Britain, with investment in efficient, high-tech manufacturing processes resulting in huge gains over the past decade. The average automotive industry employee is now responsible for generating a staggering annual £440,000 in turnover. Our sector is a major contributor to the UK economy, and to ensure it continues to grow and add value, partnership with government will be vital.

Mike Hawes, SMMT Chief Executive
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Links

SMMT reacts to VED reform in the Budget

In his Budget statement on Wednesday, the Chancellor announced a new vehicle excise duty (VED) banding system for cars registered on or after 1 April 2017.

First year rates will vary according to the vehicle’s CO2 emissions. There will be a flat standard rate of £140 for all cars for subsequent years, except those emitting 0g/km of CO2, for which the standard rate will be £0.

All cars, including zero-emitters, with a list price above £40,000 will be subject to a £310-per-year supplement for the first five years in which the standard rate is paid.

You can read SMMT's statement in response here.

Record half-year for UK new car market

Figures released this week show that registrations of new cars in the UK grew 7.0% in the first half of 2015 to the highest half-year total on record.

1,376,889 cars were registered between January and June – higher than the previous record of 1,376,565 in the same period in 2004. Buyers’ appetite for British-built cars is on the increase, meanwhile, with 13.9% (around one in six) choosing a UK-manufactured vehicle so far this year – the highest level in five years.

Read more here.

Strong van demand drives CV market to half-year record

Strong growth in the van market proved a defining factor in the half-year record for commercial vehicle registrations. 209,515 CVs were registered between January and June, up 21.8% on the same period last year.

Read more here.

Bus and coach market booms in first half of 2015

New bus and coach registrations grew 17.2% to 4,679 units in the first six months of the year, while converted buses led the way in a strong June.

Read more here.

Webinar: access to finance

Access to finance is key to growth within the automotive supply chain. Historically there has been a mismatch between the banking sector's approach and suppliers' lending needs.

SMMT is hosting a webinar on Thursday 23 July from 10:30 to 11:30, which will cover access to finance issues within the supply chain. Participants will hear from Kevin Rimmer, Head of Manufacturing Sector at Yorkshire Bank, and Michael Mychajluk, Supply Chain and External Engagement Manager at Jaguar Land Rover.

The webinar will include a 30-minute Q&A session.

To register, click here.

AAITF in Shenzen: growth opportunities for the aftermarket

Aftermarket companies are urged to capitalise on the huge growth opportunities in China by joining our International team at the Automotive Aftermarket Industry and Tuning Fair (AAITF) in Shenzhen next year. Taking place on 26-28 February 2016, the event offers a fully equipped booth from just £2,850, with marketing support and buyer introductions also available. Exhibitors can claim a grant of £2,500 from UK Trade & Investment.

For more details please see the event flyer here or contact Matt Smith in SMMT's International team.

SMMT vacancy: Senior Technical Manager – Powertrain, Fuels and Research

SMMT is looking for a lead technical specialist for powertrains, fuels and noise on regulations, standards, government policy and strategy in all relevant technical areas for the UK automotive industry.

They will develop SMMT views and positions working with member companies, colleagues and stakeholders, and represent SMMT members’ views to government and other stakeholders at UK, EU and UN level.

For more details click here.

Week in Brussels and Westminster

Follow the links for the latest news from Brussels and Westminster.

CV sector news

For the latest commercial vehicle sector news, visit www.TransportNewsBrief.co.uk and follow @TNB_news on Twitter.

Diary dates

SMMT Open Forum – Cranmore Park, Solihull
15 October 2015 – e-mail here for more information.

SMMT Annual Dinner – London
24 November – click here for more information.

Automotive information

Follow the links below to download:

• The latest new vehicle registrations and manufacturing data.

• Sustainable business improvement information from Industry Forum.

• Automotive publications produced by SMMT.
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