SMMT outlines plan to protect small volume OEMs
£5bn sector is a well-established UK success story - now it needs some help with the challenges ahead
Next time some ignorant so-and-so tells you we don’t make any cars in the UK anymore and things just aren’t like they used to be, here are some stats to pipe them down with. According to the Society of Motor Manufacturers and Traders, British small volume automotive manufacturers - folk like McLaren, Morgan, and Bentley - turned over £5.5bn in 2024. Nine out of ten of the cars made are exported, so while representing just four per cent of total UK car production, they accounted for 12 per cent of the total value. All while supporting 15,000 people in high-skilled, well-paid roles - the SMMT’s words, not ours - alongside 60,000 further jobs in the supply chain. So there’s absolutely a success story to talk about when it comes to making cars in the UK.
But changes are afoot for the industry, and while the Small Volume Manufacturers (SVM) are thriving for the moment, the SMMT is adamant they will require specific assistance from the Government to tackle what’s coming. The SMMT’s latest report, The UK’s Small Volume Automotive Manufacturers: An Enduring British Success Story, outlines what those challenges are and how they might be tackled. The problems are familiar - the need to decarbonise, the global economic predicament, rising costs, and the skills transition - with a recognisable set of dire consequences as well. Because volumes tend to be lower for these niche makers and development cycles longer, it can take more time to recoup investment. So the right decisions have to be made for the right cars at the right time; it’s much harder for small makers to deal with a misstep or a change in legislation than it is for the big players.
Pleasingly, though, the SVM report outlines five measures it thinks should be introduced ‘to support a successful sector, delivering innovation, trade, and jobs, and boosting UK economic activity in every region of the country.’ They include support for upskilling a workforce, further trade negotiations to keep exports flowing freely, help with the decarbonisation effort (including the need for ‘flexible pathways’ when dealing with lower volumes), more R&D funding, and, more broadly, recognising the contribution of the SVM sector. ‘It should be a key consideration in the Government's forthcoming industrial and trade strategies’, says the report. Hear, hear.
The photo seen here comes from the Foreign, Commonwealth, and Development Office in London, where representatives from the Small Volume Manufacturers met with MPs. Industry Minister Sarah Jones said: “We’re ensuring our carmakers go from strength to strength as we deliver our Plan for Change, and we’ve already secured landmark trade deals with the US and India, which will cut tariffs for the sector and create new export opportunities. Our modern Industrial Strategy will set out a long-term plan to support our manufacturers, including by creating the right conditions for increased investment, bringing growth, jobs, and opportunities to every part of the UK.”
I also suspect that in the push towards electrification, governments around the world will continue to introduce policies that have the carrot and stick approach, with the stick being to massively increase fuel excise. This may mean that due to fuel prices, various industries will become unviable. I wouldnt want to be a manufacturer of low volume ICE vehicles if the price of fuel goes to, say, $10-20 a liter. Imagine filling a 50 liter tank at $20 a liter. Yikes.
A bit shortsighted, isn't it?
I also suspect that in the push towards electrification, governments around the world will continue to introduce policies that have the carrot and stick approach, with the stick being to massively increase fuel excise. This may mean that due to fuel prices, various industries will become unviable. I wouldnt want to be a manufacturer of low volume ICE vehicles if the price of fuel goes to, say, $10-20 a liter. Imagine filling a 50 liter tank at $20 a liter. Yikes.
McLaren is owned by the Bahrain Royal Family
Caterham is owned by a Automotive Japanese group
Morgan is owned by an Italian Investment Group
So Ariel.
McLaren is owned by the Bahrain Royal Family
Caterham is owned by a Automotive Japanese group
Morgan is owned by an Italian Investment Group
So Ariel.
If there are not enough large volume OEMs to sustain a widget factory, then where do the smaller volume makers source their widgets?
There will still be availability, somewhere, at some price, but choice might start to become limited.
Unless the cars comply with foreign regulations they won't be saleable outside the tiny UK market.
Oil and gas companies will continue producing well beyond 2035, just the known current accumulations in place will produce for next 20-30 years depending on recovery factors and production techniques applied.
As for demand, well plastics, all air travel, and naval vessels have no viable alternatives, and ICE cars just the ones currently in existence will create significant demand for at least next 10 years, not accounting for the millions of new build ICE cars still being built annually (~4 million last year).
Will companies continue investing in building engines? Certainly the range of engine manufacturers and configurations will reduce, but they certainly will continue manufacturing well into next decade.
Not to mention bio fuels.... which is "renewable" to keep ICE cars going
Absolutely champion those who still make cars in the UK, but we are in a different world.
Sadly, there is zero pride or even understanding amongst the wider public in our engineering heritage. This is partly why there are so many Chinese SUVs on the roads... Mr and Mrs Average simply don't care.
The SMMT is part of the problem - particularly the 'and Traders' part of its title. Many of its members just love flogging Chinese SUVs, thanks very much, and couldn't really care less about UK factories.
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