Data published by trade group SMMT this week shows the new car market held steady in October, just pushing into growth territory with a 0.5% uplift.
In even better news, a quarter of buyers opted for electric cars, putting this year’s ZEV tally ahead of the whole of 2024 with two months still to go. The overall market is also on course for annual growth with the latest industry outlook expecting it to top two million units for the first time since 2019.
Such growth would be sorely needed, yet it is now at risk from proposals to scrap Employee Car Ownership Schemes (ECOS), and the possibility of pay-per-mile taxation, says Mike Hawes (SMMT Chief Executive).
Hawes noted that ECOS is vital for industry, given that around 100,000 new and increasingly zero-emission cars a year are supplied through it, equivalent to around 5% of the annual new car market.
“It is unsurprising, therefore, that its removal would inflict substantial damage on the new and nearly-used markets. As SMMT analysis shows, acute consequences for an already challenged sector would follow, costing UK Automotive some £1 billion, hamstringing future investment and putting manufacturing jobs across the country on the line,” he said.
More worryingly still, ahead of an Autumn Budget that seeks to raise revenue, ending ECOS would actually incur a half-billion-pound hit to the Treasury in lost VAT and Vehicle Excise Duty receipts, Hawes said.
“Such a sum, combined with the impacts on industry, would cost more than double the Electric Car Grant, a grant that was designed to stimulate sales and growth, not counteract it.
This risk is amplified even more by the possibility of pay-per-mile taxation for EVs – entirely the wrong measure at the wrong time, undermining manufacturer efforts to reach already challenging ZEV Mandate targets.”
Hawes noted that the Autumn Budget is the Chancellor’s opportunity to pull the necessary fiscal levers, with measures that allow market growth, tackle the UK’s high energy costs, bolster supply chain resilience, boost skills, attract inward investment, and deliver strong, free, and fair trade.
All these will help set the foundations for success, not just for the automotive industry but the UK economy and society, he said.
Leave a Reply