The UK automotive industry’s importance to Europe’s economy has been highlighted in new analysis from the
Society of Motor Manufacturers and Traders (SMMT), which warns that proposed EU ‘Made in Europe’ measures could jeopardise €24 billion of economic activity across the bloc.
Published as negotiations continue over the EU’s Industrial Accelerator Act (IAA), the report shows how deeply integrated vehicle manufacturing and supply chains remain on both sides of the Channel. The UK is the EU’s largest export market for passenger cars, while EU manufacturers sell more automotive components to the UK than to any other global market. Together, the trading relationship is worth around €80 billion annually.
Research by Oxford Economics estimates that UK automotive production supports €24 billion of economic activity across the EU, extending beyond manufacturing into sectors such as utilities, finance and real estate. The UK automotive sector also supports around 250,000 EU jobs through supply chain activity and consumer spending generated by wages.
According to the analysis, UK vehicle exports to the EU generate €5.6 billion of spending across member states, supporting 58,000 jobs and contributing €1.6 billion in tax revenues.
The SMMT argues that these benefits are at risk if the IAA excludes UK-built vehicles from provisions designed to support products made within Europe. Under current proposals, vehicles manufactured in the UK could lose access to incentives available to EU-built models, including support for greener corporate fleets, CO2 super credits and public-sector procurement opportunities.
The organisation warns that such measures would place UK-built vehicles at a competitive disadvantage in their largest export market, potentially reducing demand and weakening UK purchases of EU-made components and services. It also argues that restricting access could increase costs and reduce choice for European consumers at a time when the industry is investing heavily in the transition to zero-emission mobility.
The potential impact would be felt across Europe’s automotive manufacturing centres. The report estimates GDP exposure of around €6.3 billion in Germany, €2 billion in France, €1.7 billion in Italy and €1.5 billion in Spain. UK automotive production is also estimated to support 69,000 jobs in Germany, 24,000 in France, 22,000 in Spain and 20,000 in Italy.
Dependence is particularly significant in parts of Central and Eastern Europe, where UK automotive output supports 23,000 jobs in Poland, 14,000 in Romania, 13,000 in Czechia and 11,000 in Slovakia. In Slovakia and Czechia, this equates to up to 0.46% and 0.24% of total employment respectively.
Mike Hawes, SMMT chief executive, said: “The EU and UK automotive sectors have traded, invested and grown together over many years. Despite Brexit, supply chains remain deeply integrated and the cross-Channel trading relationship is worth €80 billion a year, supporting jobs, growth and investment.
“The EU is rightly focused on strengthening its industrial base, but the UK remains fundamental to Europe’s automotive ecosystem and is therefore essential to that ambition. Excluding the UK from ‘Made in Europe’ would be an own goal, weakening competitiveness, reducing scale and limiting consumer choice.
“We need a better outcome, one that recognises UK automotive as a trusted partner in the Industrial Accelerator Act and strengthens, rather than fragments, Europe’s automotive industry.”