Britain and India have the potential to expand post-Brexit trade in the auto sector, the head of the body representing British manufacturers said, as exports of U.K.-made cars to India rose 8.3% in the first half of the year, while those of Indian-made cars to the U.K. almost doubled. The 8.3% rise in sales of U.K. cars was driven by increased demand for British-made luxury cars, while the number of India-built cars rose by 48.6%.
Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders (SMMT), said that there were many opportunities for growth in areas such as in the development of autonomous, connected vehicles, as well as in the Indian after-market segment. “The U.K. currently has a negligible part of that market in India, but we have a lot of expertise and there are a lot of products that could be developed,” he said in an interview to this paper in London.
“We want to develop those relations, but obviously it had to be mutual.” However, he added that the prospect of increasing sales of British-made luxury cars, for which there was great demand in India, remained limited with high tariff regimes still in place and expressed reservations about the potential for changing this. “One would hope so but history would suggest its going to be incredibly difficult,” he said.
His comments came as the SMMT said U.K. car production fell 2.9% in the first half of 2017, as demand in Britain declined, which it attributed to the current uncertainty around the Brexit negotiations. The industry is also lowering its ambition of producing 2 million cars a year by 2020.
“The U.K. automotive industry is in particularly challenging times in terms of production, new cars sales and level of investment,” said Mr. Hawes.
Interim arrangements
The SMMT has been pushing for interim arrangements that maintain access to the single market and customs union to avoid a cliff-edge situation. ‘We are totally integrated with the European automotive industry — the future relationship we have is fundamental to our continued success. We need to maintain the barrier free trade that we currently enjoy,” he said, adding that reverting to WTO termswould be disruptive to the supply chain.