UK Government Report

Description of Sector

All major global vehicle manufacturers with plants in the UK are foreign owned. In general, the business model for volume vehicle producers is to use UK sites to supply the European market (with alternative sites in Asia and the Americas supplying those markets).

Investment decisions and sourcing choices are often made from European or Global headquarters. Investment decisions are made against a wide range of key
performance indicators (set out in the Automotive Council International Competitiveness report, 2015).

The current EU regulatory regime

The arrangements described in this section are examples of existing arrangements between countries. They should not be taken to represent the options being
considered by the Government for the future economic relationship between the UK and the EU. The Government has been clear that it is seeking pragmatic and
innovative solutions to issues related to the future deep and special partnership that we want with the European Union.

EU Customs Union and Single Market

Articles 28-37 of the Treaty on the Functioning of the European Union (TFEU) set out the Treaty provisions on the free movement of goods, including the establishment of the Customs Union. This has been achieved by establishing the Customs Union within the EU and by preventing Member States imposing customs duties or formalities on goods imported from other Member States. In addition, these rules prevent Member States imposing restrictions on the quantity of imports and exports of a particular item (e.g. quotas or an import or export ban).

This legal framework also prevents non-tariff barriers that may restrict imports and exports in less direct ways, for example, by applying product standards and regulations that make it harder in practice for goods coming from one Member State to be sold within another. The exception is where those restrictions can be justified on certain grounds. The legal framework has been achieved by establishing a common set of product rules, underpinned in many cases by voluntary standards. For goods not covered by those rules and standards, the principle of mutual recognition has been developed (whereby once goods have been lawfully manufactured and marketed in one Member State, another Member State cannot then require it to comply with additional product rules). Finally, goods imported from other Member States must be treated in the same way as goods produced nationally.

Regulatory standards

Regulatory standards play a crucial role in determining the design and production costs of a vehicle affecting vehicle design, components and manufacturing
processes. The harmonised regulations of the United Nations Economic Commission for Europe (UN-ECE), accepted in more than 50 markets (but not the USA), help to minimise these costs. UN-ECE standards relate predominantly to safety.

The UK Government implements EU legislation on harmonised vehicle standards for relating to all road vehicle manufacturing. This legislation applies across the UK but the national governments in Scotland, Wales and Northern Ireland can make separate provisions for the use of vehicles in certain circumstances.
46. Regulatory barriers are one of the industry’s most significant concerns, in relation to international trade with non-EU markets. These include differences in local testing and certification requirements, and application of technical regulations different to those agreed globally through UN-ECE. Alongside efforts to address regulatory barriers through bilateral and plurilateral agreements, the UK will continue to participate and influence UN-ECE Regulations at the multilateral level.

Type approval

All new vehicles and trailers sold in the UK must be type approved (whole vehicle approval) by an EU type approval authority prior to registration. This is a process that ensures vehicles irrespective of where they are produced comply with relevant environmental, safety and security standards and account for both the UN-ECE and EU led regulations. The UK type approval authority is the Vehicle Certification Agency (VCA), an executive agency of the Department for Transport.

Whole vehicle type approval brings together all the individual system and component approvals for a vehicle into a single legal document enabling a manufacturer to demonstrate that it complies with all the relevant technical requirements. The manufacturer can then produce subsequent vehicles in conformity with the original approval, and issue a certificate of conformity for each vehicle.

Member States are permitted to implement national schemes for low volume production within certain guidelines. These national schemes are lighter touch and
allow deviation from the full set of EU vehicle standards.

CO2 emissions

EU Regulations (EC 443/2009 and EC 520/2011) deliver reductions in CO2 emissions from new cars and vans sold into the single market. In short, this works by setting fleet averaged targets for manufacturers. Significant fines for noncompliance are in place, encouraging manufacturers to invest in the development of more fuel efficient and new technologies.

Air pollutants

European emission standards (EC 715/2007) define the limits for exhaust emissions of new vehicles sold in the EU and EEA member states. They set limits for emissions of nitrogen oxides, total hydrocarbons, non-methane hydrocarbons, carbon monoxide and particulate matter. The emission standards are set in a series of directives staging the progressive introduction of increasingly stringent emissions standards.

In addition to stringent emissions standards, a new Real World Driving Emissions test will be introduced as part of the European Community (EC) Type Approval process from 2017. This is to ensure that new vehicles more accurately meet the regulated emissions limits when tested in real world driving situations.

Connected and autonomous vehicles

The development of regulation and standards for the operation and use of connected and autonomous vehicles in the EU is emerging. Systems and networks are likely to be run by manufacturers and operators transnationally as well as access networks and systems at national and local level. Standards for systems are likely to be set at international level at UN-ECE. However, operational usage and implementation may be affected by what is allowed under EU Type Approval. EU competency will extend to things like connectivity and Cooperative Intelligent Transport Systems (C-ITS),data flow and privacy, insurance, and infrastructure.

EU funding

The UK automotive sector has not been a major beneficiary of Horizon 2020 funding. Funding of €21.4 million out of a total of €344.2 million was secured from the Green Vehicles and Road competitions in 2014 and 2015.

EU funding can also contribute indirectly at the business level to the automotive sector – in particular, the range of EU grants and loans for small and medium sized enterprises, and the support for research and innovation, much of which come from the European Structural and Investment Funds.


Alternative Post-Brexit Business Frameworks (UK Government Report)

Best of Both Worlds

Manufacturing in Ireland

Distribution from Ireland

Trade in Goods

Product Standards

Irish Standards

CE Marking

EU Accreditation

EU Product Surveillance

Product Responsibility

Product Liability for Importers