The UK's auto industry trade body has called on the UK's government to deliver on support measures amid rising concerns that already announced measures are proceeding too slowly and failing to provide the hoped for support for the industry in the recession.

The message was delivered in a letter to chancellor Alistair Darling ahead of the 2009 Pre-Budget Report (9 December) by the Society of Motor Manufacturers and Traders (SMMT), on behalf of the industry.

To allow the UK motor industry to recover and plan with confidence for the medium- and long-term, SMMT is calling for a sustained and strategic approach to recovery from government:
The SMMT called on the government to:

  • Maintain the reduced 15% VAT rate into 2010 and phase-in gradually any increase to avoid a sharp fall in consumer demand.
  • Defer the third stage of increases to DVLA first vehicle registration fees.
  • Remove the 3% diesel car penalty in the company car Benefit In Kind calculation.

It also said the government should take steps to support business, including reducing financial and legislative burdens.

It said the government should:

  • Encourage commercial vehicle purchases by maintaining and increasing the enhanced writing-down allowance to 60%.
  • Reconsider lifting the expensive car cap (£80,000) in the company car tax regime to remove the stigmatising effect on UK premium products during these difficult market conditions.
  • Make an exceptional enhancement to the Annual Investment Allowance, increasing it to GBP500,000.

The SMMT also said that  the government must show that the UK is an 'attractive option for inward investment by global automotive companies through promoting business confidence and its support for new technologies'. 

It said that the government should speed up the release of funds from the Automotive Assistance Programme (AAP) as well as prioritise funding for the research, development and demonstration of technologies required to deliver future low carbon vehicles.

The SMMT also said the government should urgently reconsider the removal of the 20ppl duty incentive for biofuels scheduled for April 2010 and consider enhanced capital allowances for ultra-low carbon commercial vehicles.
"The Pre-Budget Report provides an important opportunity to sustain the recovery and support the longer-term competitiveness of the UK motor industry," said SMMT chief executive Paul Everitt.
"It is essential that existing support schemes begin to deliver more quickly and help to encourage investment in R&D, skills and productivity. Measures that help to signal a long-term commitment to manufacturing and help to stimulate key parts of the market will boost business confidence and the attractiveness of the UK to inward investors," he said.

Sources in the UK auto industry have told just-auto that the protracted timescale for getting AAP funding to flow to eligible companies is causing rising frustration.

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