Vehicles remain UK’s most valuable export despite pandemic

The automotive industry has urged the government to put the sector at the heart of future trade negotiations, after a new report showed vehicles are the UK’s single most valuable goods trade export.

The call, by the Society of Motor Manufacturers and Traders (SMMT), came as its report showed that vehicle export revenues reached £27bn in 2020 – more valuable to the UK than power-generating machinery and gold, even during a year when the Covid-19 pandemic disrupted trade and shut down markets around the world. 

The automotive sector as a whole generated a total trade revenue of £74bn, with more than 80% of British-built cars and more than 60% of light commercial vehicles destined for export. 

“With hopes rising worldwide that the pandemic is now in retreat, the UK’s trade policy must now take advantage of the opportunities from a post-Brexit, post-fossil fuel world to restore growth and jobs, with automotive central to this ambition,” said an SMMT announcement.  

With the global car market expected to grow significantly in regions such as Asia and Eastern Europe, the SMMT called for future trade deals to include dedicated automotive ‘annexes’ and provisions to reduce tariffs and regulatory barriers. It also recommended establishing rules of origin, which would reflect the UK’s future supplier base as manufacturing moves away from the combustion engine, as well as ensuring manufacturers can recruit top talent from around the world. 

Driving Global Britain, launched today (12 October) at SMMT’s inaugural Global Trade Conference, also highlights the importance of trade with the EU. About half of all cars made in Britain are exported to EU member states, while almost all vans exported by the UK end up on European roads. “While the industry looks ahead to post-Brexit trading opportunities, the EU will remain a central trade partner,” the announcement said.  

Trade policy should also ensure that rules of origin reflect ‘appropriate’ sourcing of batteries for electric cars, the SMMT added, ensuring UK-built electric vehicles can be freely exported around the world.  

Chief executive Mike Hawes said: “As the world re-emerges from the pandemic, the diversity and importance of Britain’s automotive industry is the UK’s competitive advantage for restarting growth, creating jobs and tackling climate change. With automotive at the heart of future trade policy, and negotiations focused on removing both the tariff and non-tariff barriers that stifle growth, we can drive forward the growth of ‘Global Britain’ and sustain our place as an economic, industrial and environmental leader.”