The UK Government has announced a £4.5bn funding programme for investment in UK strategic manufacturing sectors, of which over £2bn is earmarked for the automotive industry.
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The funding will be available from 2025 for five years, providing industry with longer term certainty about their investments.
The UK Government said the funding will help ensure that the UK remains at the forefront of the global transition to net zero and can ‘seize growth opportunities in the new green economy’. In automotive, the funding is expected to support the manufacturing, supply chain and development of zero emission vehicles (ZEVs).
Analysts believe the move is designed to increase the attractiveness of the UK for big future investment projects – whether in EVs or major components such as batteries. The UK faces stiff competition from the US and EU in attracting international investment in key manufacturing areas such as automotive. The US has major incentives for industrial investors in its Inflation Reduction Act (IRA) and the EU is planning a similar range of measures, too.
Chancellor of the Exchequer Jeremy Hunt said: “Our £4.5 billion of funding will leverage many times that from the private sector, and in turn will grow our economy, creating more skilled, higher-paid jobs in new industries that will be built to last.”
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By GlobalDataThe UK’s automotive trade body welcomed the news. Mike Hawes, SMMT Chief Executive, said the announcement is an “unequivocal vote of confidence in the UK’s critical automotive industry.”
He added: “Coming on the back of almost £20 billion committed by the sector in next generation plants and technologies this year alone, it is indicative of the scale of investment such support can leverage and the result of substantial collaboration between Government and the industry.
“This additional Government investment reflects the fact the UK automotive sector has the talent, the innovation and the determination necessary to thrive in the face of fierce global competition. It will deliver benefits not just for the automotive sector but for the whole country in terms of growth, high value jobs and productivity. It also sends a powerful signal that the UK is open for business.”
John Neill, Executive Chairman of Unipart Group, also welcomed the move. He said: “We welcome the Government’s commitment to advanced manufacturing and the recognition of the strategic importance of the automotive industry to the UK. As an independent management and employee-owned company, Unipart has seen the strategic benefit from investing in developing performance improvement technologies for our global clients across a range of industries including automotive. The government’s investment strategy will enhance opportunities for companies like ours to continue that vital innovation.”
