In a year when markets around the world shut down as individual countries grappled with the pandemic, every sector had to readjust expectations. For the previous three years, the UK automotive sector had generated trade revenues of more than £100 billion a year. In the year of Covid-19, business was never going to be normal, but 2020 did confirm one vital fact that should fuel optimism for all those involved in automotive; road vehicles remained the UK’s single most valuable export, generating more wealth for the nation than power-generating equipment, pharmaceuticals, or even gold. 

This is testament to the industry’s resilience, and its global excellence. Britain’s automotive sector is a powerhouse of international trade. Many countries have automotive industries, some larger in size. But no other nation can boast the depth and variety of the UK’s automotive sector. From specialist sports cars and high-end luxury vehicles to mass-market volume cars, from the vans and trucks that sustained supermarkets and broader society to the world renowned British buses and taxis, the UK produces (and exports) it all.

Although the picture is certainly improving, the pandemic is not yet over. Global shipping patterns are disrupted. Costs have risen. Key goods and components shortages remain. However, there are two further and significant challenges that will impact and determine automotive trade over the next decade. 

The first is ongoing; how the industry adjusts to a post-Brexit world. The Trade and Co-operation Agreement (TCA) fundamentally changes the way we trade with our biggest and closest market. Furthermore, it gives the UK the opportunity to negotiate future terms of trade with the rest of the world, including growing markets in Eastern Europe and Asia. 

The other challenge is to deliver shared ambitions on climate change. The UK has declared its intention to take a leading role which, for the automotive sector, most obviously means the end of sale of fossil-fuelled vehicles. The next decade will test us, and our trade performance will reveal how successfully the automotive sector adapts and takes advantage of the new opportunities.

To do so, and ensure automotive remains the trading powerhouse of Global Britain, there are two steps required. First, ensure we have a strong, globally competitive manufacturing sector, one that has transferred its undoubted excellence in internal combustion engines to expertise in electrified technologies. Second, take advantage of the TCA and forge new agreements with growth markets, break down any barriers to trade and attract investment into the UK.

We have left the EU but we have not left the European automotive sector. It is still our biggest market, our biggest source of vehicles and our biggest source of parts and components. The implications of this inter-dependence in trade terms cannot be ignored and any future trade agreements must reflect this with attainable origin requirements and tariff-free treatment in key markets. Britain must remain a destination for top global talent so our industry can deliver innovation and excellence with a global outlook. 

As the world re-emerges from the pandemic, the diversity and importance of Britain’s automotive industry should be a competitive advantage for the UK. With automotive at the heart of future trade policy, and negotiations focused on the removal of both tariff and non-tariff barriers, we can drive the growth of Global Britain and sustain our place as an economic, industrial and environmental leader.