EU’s “Protectionist” Measures Could Edge UK Cars Out of European Market

On January 29, The Telegraph reported that the Society of Motor Manufacturers and Traders (SMMT) warned that the European Union is considering a series of “protectionist” policies that could block UK-made vehicles from the European market.

The EU is reportedly planning to provide subsidies only for “Europe-made” vehicles and require fleet operators to purchase a certain proportion of EU-produced cars and trucks. The aim is to help German and French automakers resist competition from Chinese vehicles. SMMT warns that this would disadvantage UK manufacturers and undermine post-Brexit free trade agreements. Currently, the EU accounts for 57% of UK car exports.

Mike Hawes, CEO of SMMT, said: “These proposals could make it more difficult for UK cars to enter the European market. This is a significant threat to the industry.” He noted that EU member states have not reached a consensus on the “Europe-made” policy, leaving the UK in an “outsider” position.

In addition, under Brexit trade agreements, stricter “rules of origin” will take effect by the end of the year, requiring cars to prove a certain proportion of parts are locally sourced, or face tariffs. With batteries being the most valuable EV component and several UK and EU “gigafactories” still under construction, the industry is calling for a delay.

UK car production is currently at its lowest since the 1950s, totaling 764,715 vehicles last year, down 15.5% year-on-year. Exports totaled 555,826 vehicles, mainly to Europe. SMMT notes that achieving 1 million units in 2027 and 1.3 million in 2030 requires global demand recovery and new large-scale factories in the UK.