The general election had a big impact on the automotive industry, as new car sales fell by 8.5% in May in preparation for the vote. Speculation remains as to whether there will be another election, but the Conservatives remain in charge for the foreseeable future. From their proposed policies and those of their opponents, there are many changes that could occur in the automotive industry in the coming years.
Fuel and car taxes
Tax on fuel has been frozen at 57.95p per litre since January 2011 and current Chancellor Philip Hammond has promised it will remain so until April 2018. After that it remains unclear whether the price freeze will remain or there will be a hike, affecting the costs for motorists. Car tax is another issue, though it is Labour and the Liberal Democrats who are more in favour of raising taxes for vehicles producing high emissions, less so the Conservatives.
Demand for diesel cars has also fallen, amongst speculation that a diesel scrappage scheme could be introduced. As the Conservatives have plans to ensure almost all vehicles are electric by 2050, this is likely to be introduced at some point though less likely to be in the immediate future. Their manifesto called for more investment in electric vehicles and for the MOT test to require cars to be zero-emissions but with no set dates mapped out. The Lib Dems set out to ban diesel car sales in the UK by 2025, while Labour also support encouraging electric and low-emission vehicles but didn’t commit to a scrappage scheme.
Especially with the effects of Brexit set to impact upon British industry soon, the Conservatives have large investment plans for automotive infrastructure and industry. Their manifesto highlighted pumping £40 billion into transport improvements (including roads, railways and public transport) while providing support to businesses developing greener transportation. Depending on Brexit negotiations, trading relationships could change and see manufacturing move away from the UK, while for some brands it could prove beneficial.
Another interesting point from the Conservatives is that they want to invest in future cars and make the UK a leader in autonomous vehicle technology. The self-driving car is coming ever closer and it would appear Theresa May and her party want the UK to be one of the first countries to get them on the roads.
A lot of these changes in the automotive industry will depend on how long the new government remains in charge and if they stick to their plans. It looks to be an exciting time for future cars and the automotive industry as a whole.
Image courtesy of iStock.