Five years since the UK-EU TCA was signed, the UK automotive sector stands at a pivotal juncture. While Brexit has fundamentally reshaped the trading landscape, subsequent headwinds – geopolitical uncertainty, rising protectionism, tariff barriers and intensified competition in the push to decarbonise – pile further pressure on our global competitiveness. SMMT’s latest Trade Report, published this week, shows the sector’s remarkable resilience in the face of these seismic shifts. We remain on course to generate more than £110 billion in trade for the third consecutive year even though vehicle manufacturing volumes are down significantly on pre-Covid levels.

Despite Brexit, the UK remains inextricably linked with the rest of Europe, and the numbers speak for themselves – last year, £68.4 billion in automotive trade crossed the Channel, almost half as much more than trade with the rest of the world combined. More than half of our car exports go to the EU, and the majority of vehicles purchased in the UK are European made. It is a partnership that delivers for both sides.

Recent years have also seen a transformation in our cross-border trade profile. Trade in electrified vehicles between the UK and EU is up more than five-fold since 2019, with values now exceeding those of internal combustion engines. Yet this progress is under threat. The looming introduction of stricter rules of origin for batteries in January 2027, combined with unclear definitions and challenging thresholds for local content, risks imposing tariffs of up to 22% on electrified vehicles. With combustion models facing zero tariffs, this wouldn’t just undermine our competitiveness, it would hold back the transition to electrification across Europe, risking investment, jobs and growth.

This transition is already under immense pressure – as evidenced in discussions with industry leaders and other stakeholders at IAA Mobility held in Munich this week. More than 40 different models were launched or revealed, reflecting a global industry subject to the most intense competition in living memory. Pioneering products are being rolled out at rapid pace and, while the UK is committed to staying at the very front of that race, it cannot happen at any cost. Decarbonisation must not mean deindustrialisation.

That’s why we are calling on government to be proactive – monitor compliance rates, secure a workable definition for cathode active material and expedite negotiations to re-join the Pan-Euro Mediterranean Convention. By forging closer ties with the EU and making automotive central to our trade strategy, we can shore up our sector’s future, create skilled jobs, and drive a net zero future for all.

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With more than 300 such HGVs now on order, and some consortiums adapting their plans, that funding is being effectively deployed. Industry is delivering the next-generation products that operators need but the upfront cost of the fleet transition, including depot upgrades, remains a barrier to decarbonisation. That’s why the newly launched £30 million Depot Charging Scheme is a really important step, covering 75% of installation and civil engineering costs of up to £1 million per public or private fleet – giving more operators access to the benefits of overnight or back-to-base charging. With applications closing on 28 November, and installations required by 31 March next year, now is the perfect moment to make the switch.

Automotive manufacturers both build the products, and employ the workforce and generate the economic growth that the UK needs, and our sector’s key importance was also recognised earlier this year with government’s Industrial Strategy, which included the £2.5 billion DRIVE35 Transformation Fund. With funding aimed at ramping up zero emission vehicle manufacturing through large-scale capital investments in vehicle assembly, gigafactories, electric motors, fuel cells and recycling infrastructure, applications are now being assessed on a rolling basis – with decisions made within 60 working days.

Looking further ahead, the £150 million Connected and Autonomous Vehicle (CAV) trial fund will launch its first tranche in October, with a second in January. The programme will support consortiums of manufacturers, tech providers and end-users to trial autonomous freight solutions. With 150,000 HGV drivers nearing retirement and fewer than 1% under 25, automated mobility offers a major opportunity to address labour shortages and improve route efficiency.

Given the immense opportunities available at a time of rapid industry innovation, now is the time to drive your business to future growth.

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The Rexton Commercial is the new commercial variant of KGM’s existing Rexton SUV and delivers the comfort and technology of a premium 4×4 with the practical backbone of a van.

It’s a high specification vehicle that has all-terrain capability, and offers professionals a unique combination of cargo space, practicality and premium comfort.

The Rexton Commercial has a 2,200-litre loadspace, and a robust ladder chassis supports a towing capacity of 3,500Kg – unbraked 750Kg.

Because it is GB type-approved it attracts commercial vehicle Benefit-in-Kind (BIK) taxation, is VAT qualifying, eligible for capital write-down, and has a first-year Vehicle Excise Duty (VED) of £345.

The Rexton Commercial can easily accommodate several standard Euro pallets because of its wide-opening tailgate and generous proportions. The load area is accessed from the rear which has a top-hinged power tailgate, while side doors give customers the flexibility to access items located towards the front of the vehicle without the need to move bulky objects out of the way.

Describe some of the main features?

The Rexton Commercial is powered by a 2.2-litre turbodiesel engine delivering maximum power of 202PS and peak torque of 441Nm. It also comes with an eight-speed automatic transmission.

Its advanced shift-by-wire system enables electronic control driven engagement and change of transmission modes, eliminating the mechanical linkage between the gear shifting lever and the transmission.

There is selectable all-wheel drive which means drivers can activate the system based on changing road conditions. Primarily operating in 2WD mode, the Rexton Commercial allows the driver to switch between 4WD: High (4H) or 4WD: Low (4L) when needed. Also, in 4WD mode, the engine’s torque is evenly distributed to both the front and rear wheels.

Is safety a top priority for KGM?

Yes. Built using a modern and very strong body-on-frame construction, the Rexton Commercial is among the sturdiest and safest vehicles in its class, having a high-strength steel body-on-guard frame construction.

The vehicle has a range of electronic safety aids that work cohesively to safeguard passengers, other road users, and pedestrians. It has a total of six airbags – front, side and curtain.

Other safety enhancements include rain sensor wipers, automatic speed-sensing door locks, tyre pressure monitoring system, safety power windows, and reinforced rear windows.

There is a full-height fixed mesh bulkhead and opaque reinforced rear windows, for added security, while the Trailer Sway Control (TSC) system further enhances stability by detecting and automatically stabilising yaw movement, and sway, to the towed trailer.

What are the available trim levels?

The K30 entry model comes with 18-inch alloy wheels, a smart powered tailgate, LED lights all round, luxury faux leather seats, plus a 12.3-inch infotainment screen.

Meanwhile, the K40 offers a Nappa leather seat upgrade, LED cabin mood-lighting and an additional suite of safety features such as blind spot detection, and rear cross traffic warning. Incorporating all of the offerings of the K40, the K50 also includes 20-inch alloy wheels, a sunroof and rear air conditioning, as well as leather and suede upholstery.

Clive Messenger

Sales Director, KGM Motors UK

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Founded by Save the Children, The Chartered Institute of Logistics and Transport (CILT), and its Patron, HRH The Princess Royal, the charity works with communities, partners, and governments to improve road safety and access to health throughout sub-Saharan Africa.

The organisation raises funds in a variety of ways, a key one being corporate memberships that have helped it develop longstanding HGV and PSV driver training programmes across the continent.

For example, Transaid corporate partners recently donated three HGVs to the Industrial Training Centre (ITC) in Lusaka, that will be used to train hundreds of new and existing professional drivers in Zambia.

Previously operated in the UK, the vehicles comprise two Scania R450 tractor units donated by longstanding corporate partner The Malcolm Group.

In addition, Asset Alliance Group, which became a corporate partner in January 2024, supplied a DAF CF rigid, and covered the cost of shipping.

It contributes to an ongoing partnership between Transaid and the ITC which was formed in 2008 and has together trained more than 25,000 drivers during the 17-year period.

The trucks were fully serviced prior to transportation, and Transaid corporate partner Brigade Electronics installed two analogue high-definition side cameras, along with a seven-inch colour monitor in each vehicle’s cab.

These cameras activate when the indicators are switched on and are designed to eliminate blind spots and improve a driver’s view of both sides of the vehicle.

Another corporate partner, Microlise, supplied access to its fleet performance and driver safety software solutions, together with telematics equipment.

“Transaid is an organisation very close to our hearts and we take a huge sense of pride in knowing that these two vehicles, which have worked so hard for our business, can now enjoy a second life helping to make the roads safer in Zambia alongside our previously donated vehicles,”  said Andrew Malcolm, Chief Executive of The Malcolm Group.

Willie Paterson, Chief Executive of Asset Alliance Group, added: “Hearing that new duties on imported vehicles would cause a potential problem for donations, we saw an opportunity to step up and help.

“The work Transaid does is incredible and shouldn’t be limited by shipping costs.”

One of the exclusive benefits open to corporate supporters is the opportunity to volunteer colleagues to work on structured secondments with Transaid for anything from a week to more than a year.

Earlier this year, Kemi Ojo-Osagie, a graduate at logistics firm GXO, took part in a six-month placement in Ghana, supporting the nationwide rollout of a newly developed standard for training of HGV drivers.

She was the fourth graduate from GXO to take up such a Transaid secondment, with a new graduate invited to apply every six months.

The project she was involved in primarily focused on advocacy and outreach work, speaking to commercial vehicle drivers and stakeholders involved in the Driving Safety Across Ghana project.

Priorities included the development of fact sheets for drivers, as well as supporting the sensitisation of drivers at truck parks close to coastal ports. 

With funding from the Puma Energy Foundation, Transaid began driver training programmes in Ghana in 2021.

Over the course of three years, more than 2,000 drivers have received refresher training from 19 HGV driver trainers, and four master trainers.

Training has been carried out to new standards crafted specifically for Ghana’s road transport sector, developed by more than 30 stakeholders with input from Transaid’s partners and experts in France, Tanzania, Uganda and the UK.

Thelma Ayisi, Project Manager for Transaid in Ghana, said: “The secondees who join us every year are a testament to GXO as an organisation.

“They are always excellent additions to our team and offer impressive levels of expertise and professionalism.”

Logistics solutions provider DP World recently signed a three-year agreement with Transaid to become its latest corporate partner, joining more than 30 companies from across the industry in pledging its support to the organisation.

DP World operates across 78 countries offering supply chain solutions within the automotive, chemicals, healthcare, perishables, retail and technology sectors.

In the UK it operates two deep water ports and rail freight terminals at London Gateway and Southampton, a logistics park and an advanced software business providing online links to customers and border control.

Ernst Schulze, Chief Executive Officer for Ports and Terminals at DP World in the UK, said: “DP World has a firm commitment to supporting communities and leaving a positive legacy in the areas which we operate.

“We have been closely following Transaid’s projects for some time, and we are excited to get behind an organisation which does such fantastic work around road safety and access to healthcare in sub-Saharan Africa.”

Meanwhile, Transaid has partnered with fellow nonprofit organisation American International Health Alliance (AIHA) on a 12-month supply chain strengthening project, funded by The Gates Foundation, with Ethiopian Pharmaceutical Supply Services (EPSS).

The project will see Transaid work to build human resources capacity and support staff development within the EPSS.

This Addis Ababa-based agency procures nearly $1 billion worth of pharmaceuticals and medical supplies each year, for delivery to more than 4,000 health facilities across the country.

The project has so far included the development of a tailored implementation plan to guide the rollout of actions identified in the initial analysis, with clear responsibilities for all project partners and a tracking tool to measure inputs.

Setting up in-person and remote workshops to support knowledge exchange will also form an important part of the plan.

Sam Clark, Head of Programmes for Transaid, said: “The wealth of knowledge we can unlock through our corporate partners is second to none.

“Combined with everything we already know as an organisation about transport, logistics, and access to healthcare from three decades working across sub-Saharan Africa, it makes Transaid the perfect delivery partner for a project like this.”

For more information and to find out how you can support the organisation visit www.transaid.org

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Among the group was Labour MP Ruth Cadbury, Chair of the Transport Committee, and Paul Sainthouse, Managing Director at Dawsongroup, which supplied a specially branded bus for the event.

Catch the Bus Month celebrates the wider social, environmental and economic benefits of bus travel, from cutting congestion and pollution to supporting community connections and offering affordable travel for all.

The campaign is marked by hundreds of activities across the country to promote bus as a means of travel. Promotions and special offers will also run online.

For example, Stagecoach has recently launched the second phase of its national marketing campaign aimed at adults across the UK.

In England, messaging focuses on the value of never paying more than £3 for a single journey.

For Scotland, the emphasis is on savings of up to 30% through the Stagecoach app, while in Wales the focus is on the flexibility of Tap on, Tap off capped fares.

Paul Sainthouse said: “We all know the true value of effective public transport and its huge contribution towards delivering society’s economic and environmental objectives, as well as being a key contributor to social cohesion and personal mobility.

“Assisting in getting that message across is something we are very proud of.”

Mike Wood MP, Bus and Coach APPG Chair, said: “The APPG for Bus and Coach is proud to stand alongside operators, passengers and campaigners in championing the role of the bus – past, present and future.”

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In 2026, DHL eCommerce UK will be rebranded as Evri Premium – a network of DHL, and it will remain a separate network that offers fast, time-sensitive deliveries with enhanced shipping security protection for high-value and large items.

The combined group will bring together a team of over 30,000 couriers and van drivers, along with 12,000 employees, and a fleet of 8,000 vehicles, all dedicated to delivering more than 1 billion parcels and 1 billion letters annually, with the addition of UK Mail.

This new Evri Group will include Evri’s core offering of a flexible courier network for low-weight and low-value parcels, along with a dedicated and secure premium van network for high-value items and B2B parcel services.

It will also leverage DHL eCommerce’s expertise in cross-border parcel shipping and out-of-home network of more than 150,000 global access points. 

The combined Evri Group is expected to create a premier parcel and mail delivery business, offering a cost-effective solution for domestic and international parcel logistics.

Martijn De Lange, Chief Executive Officer, Evri, said: “Through access to DHL’s well-recognised global network, the new Evri Group will offer an enhanced international capability, and we will enter the UK mail space for the first-time ever to operate business mail services.”

Pablo Ciano, CEO of DHL eCommerce at DHL Group, said: “CMA clearance marks a significant step forward in our commitment to providing the best service and innovative solutions in the UK parcel delivery market.”

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To coincide with Pothole Prevention Week – 8 to 14 September – the two organisations have joined forces with a view to getting councils to understand the benefits of low-cost preventative maintenance treatments that seal the road surface from water ingress and keep them in better condition for longer. 

The RSTA says many highway authorities are ignoring preventative treatments that typically could be applied from year five after a new road surface is laid, to keep roads in good condition for longer.

Instead, many are leaving them untreated and allowing potholes to form, before eventually having to replace the top layer of asphalt, often after 10 to 15 years, at a far greater cost.

Government road condition data analysed by the RAC shows half of local highway authorities in England did not use any form of preventative maintenance on their A roads in the 2023/24 financial year.

Simon Williams, RAC head of policy said: “We need to ensure the most informed decisions are being made to maximise return on the Government’s £6.4bn capital investment in England’s major and minor roads.

“The government has already taken on board our joint calls about preventative maintenance by asking councils to report how much of this work they have done and are planning to do.

“A logical next step is requiring mandatory training for authorities that have carried out little or no preventative maintenance to fully understand its benefits.”

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Five years on from Brexit, SMMT’s latest Trade Report, Unmarked Routes: Britain’s Pathway to Stronger Automotive Trade, sets out how the UK sector remains a global trading powerhouse, generating £115 billion in imports and exports last year. The sector is on course to generate more than £110 billion in trade for the third year running, shipping vehicles, parts and components around the world, in the face of incredibly tough conditions with tariff barriers, rising protectionism, and geopolitical uncertainty.1

While Brexit can be viewed as one challenge among many, leaving the EU has fundamentally altered trade conditions between the UK, the EU and other major trading partners. The industry has had to absorb significant costs from new customs and border requirements, while facing additional regulatory and tariff barriers and trying to secure billions to invest in electrification and other new technologies. Despite the EU-UK Trade and Cooperation Agreement (TCA) being signed almost five years ago, uncertainty still remains, with lack of clarity on trade definitions for key battery components and tougher rules of origin for electric vehicles due to kick in in less than 16 months’ time.

While many factors have affected global trade performance since Brexit, bilateral UK-EU automotive trade has underperformed compared with the UK’s trade with the rest of the world. This has been most visible in a slowdown in both export and import values with the bloc. Given the export focus of the sector, growing trade with all export markets is important but, with more than half of UK car exports heading into the EU and the vast majority of cars bought in Britain coming from Europe, the importance of cross-Channel trade is stark.

The UK and EU sectors remain inextricably linked, despite Brexit delivering a seismic change in trading conditions. £68.4 billion in annual automotive trade was generated between the two markets last year, representing by far the bulk (59.7%) of all UK Automotive trade value. A closer relationship would help safeguard this critical business – business that is increasingly driven by electrified vehicles (EVs) – with battery electric, plug-in hybrid and hybrid models now the largest proportion of cross border automotive trade.

Thanks to massive investment by manufacturers based in the UK and EU to deliver ever greater EV model choice covering every segment and price point, and growing demand, trade in EVs across the Channel has continued to rise. The value of this trade is up 424% compared with pre-Covid levels, from £4.6 billion in 2019 to almost £24 billion in the 12 months to June 2025.

The value of UK battery electric, plug-in hybrid and hybrid electric vehicle exports to the EU, meanwhile, has consistently outpaced pure internal combustion engine (ICE) shipments, and is today worth double. EU manufacturers, meanwhile, shipped EVs worth £17.6 billion to the UK in the last 12 months up to June 2025, with pure electric shipments outpacing those from China more than two-fold, and overtaking the value of ICE exports for the first time.

This growth is at risk, however, from a lack of clarity around tougher rules of origin requirements – agreed as part of the UK-EU TCA – for batteries and battery parts due from January 2027. These rules are currently unclear regarding how cathode active materials (CAM), an essential component in battery production, are defined, and they also set thresholds for local production in the UK or EU that are extremely challenging. Despite massive investments into the battery supply chain – notably in Somerset and Sunderland in the UK and at various locations across Europe – supply has not kept pace with demand.

Unless localised battery production increases considerably in the next 16 months – an impractical expectation given investment and construction timescales – electrified cars, buses and commercial vehicles that do not meet these new thresholds will be subject to tariffs ranging between 10% and 22% when traded across the Channel. With combustion models facing 0% tariffs, such a situation would make electrified vehicles uncompetitive in each market at a time when regulations stipulate manufacturers sell ever more zero emission models.

Industry is therefore calling on government to monitor expected compliance rates with 2027 EV rules of origin and engage immediately with the EU to agree on a workable cathode active material (CAM) definition. In parallel, the industry calls on government to consult with businesses and fast-track negotiations with the EU and other parties to re-join the Pan-Euro Mediterranean (PEM) Convention on rules of origin. While not a panacea, doing so would help strengthen UK-EU auto trade, enhance market access in trade with 14 other PEM participants and offer a flexible alternative to address this challenge if offered in parallel to TCA origin rules.

Unmarked Routes: Britain’s Pathway to Stronger Automotive Trade details a number of recommendations for the British government to ensure the UK continues to be a powerhouse of global automotive trade, including:

EV trade with Europe

• Provide an unwavering commitment to avoid tariffs on EU-UK EV trade
• Monitor compliance rates with 2027 EU-UK EV rules of origin
• Agree to a workable definition of origin rules for cathode active materials
• Fast-track negotiations to re-join PEM

Global relationships

• Finalise trade negotiations with South Korea and avoid the risk of tariffs from January 2026
• Fix the bilateral trade relationship with Canada with negotiations on an enhanced bilateral FTA while reinstating EU cumulation clauses and origin quotas in the meantime
• Secure an enhanced EU-UK regulatory partnership
• Maintain a balanced, fair and equitable trade relationship with China
• Seek progressive improvements on the Economic Prosperity Deal
• Ensure a swift implementation of the UK-India FTA
• Seek further tariff reductions with new and existing FTA partners

Regulation, investment and engagement

• Deliver an investment and industrial strategy to support UK vehicle production growth
• Step up engagement on automotive regulatory barriers
• Develop an effective single trade window together with business
• Relaunch a credible export promotion programme for the UK
• Rethink the UK business engagement model

Notes to editors

1: On course to generate more than £100 bn in 2025, £115 bn in 2024 and £120 bn in 2023

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Matt Smith, Head of International, shares about upcoming activities for the September edition of the SMMT International Update.

Over the next five weeks, SMMT will be taking member companies to the world’s two biggest vehicle producers and markets – China and the USA. Both these visits are rare opportunities to engage directly with overseas manufacturing plants, including introductions with senior staff, all supported by SMMT.

In China, our visit includes stops at Hefei and Wuhan for meetings with major manufacturers, followed by the World New Energy Vehicle Congress in Haikou, including a special presentation session. In October, meanwhile, we will be in Alabama and Tennessee, attending the Southern Automotive Conference before visiting Mazda-Toyota Manufacturing, Nissan and Volkswagen.

Spaces are still available on the US visit, so register your interest if you would like to join us and maximise the competitive advantage that SMMT member offers.

We are also delighted for Catalonia Trade and Investment to have contributed an article on the mobility conundrum surrounding EV adoption and how the upcoming Tomorrow.Mobility World Congress will address these challenges.
 

Upcoming events:

24-27 September, China: Trade mission – World New Energy Vehicle Congress join the trade mission to Wuhan and Hainan organised by DBT and supported by SMMT

6-9 October, USA: Trade mission – Southeastern EV supply chain join the trade mission to Alabama and Tennessee focusing on the EV Supply Chain

14-18 October, France: Trade show – Equip Auto Paris SMMT is hosting a dinner on 16 October for members exhibiting or attending; members also receive an exclusive discount to exhibit

28-30 October, South Africa: Trade show – Automechanika Johannesburg an event support payment of £500 from Messe Frankfurt is on offer to UK companies

3-5 November, Czech Republic: Trade mission – CEE Automotive Supply Chain the programme includes a briefing at the British Embassy, conference, B2B meetings and networking

28-30 January, India: Trade show: Symposium on International Automotive Technology (SIAT) one of India’s premier technology events, register your interest to join DBT and SMMT activity at the event

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