![\"UK](\"https:\/\/www.globalvillagespace.com\/tech\/wp-content\/uploads\/2026\/07\/uk-automotive-industry-at-a-crossroads-as-protectionism-challenges-free-trade-amid-chinese-competition.jpg\" "\\"UK")
<\/a><\/p>\n\n European Union has already proposed protectionist legislation \u2013\u00a0which could lock UK out of key benefits<\/p><\/blockquote>\n
Rise of Chinese brands has prompted argument over how best to protect British and European car industries<\/p>\n
\nHow should a country built on free trade react when its most important trading partners start erecting barriers, as the EU and the US are doing? Or when that free trade starts benefiting the importer to the detriment of its own industry, as is happening with the Chinese?<\/p>\n
That conundrum facing the UK was a key theme that this year\u2019s Society of Motor Manufacturers and Traders (SMMT) Summit conference, which brought together key car makers and suppliers to discuss how to respond to rapid changes to the trade status quo.<\/p>\n
Just the fact that erecting barriers was being discussed indicated that a seismic shift was happening.<\/p>\n
\u201cIt\u2019s the first time in a long time I\u2019ve heard the word \u2018protectionist\u2019 used positively in a conference,\u201d said\u00a0Sam Lowe, partner at business advisory firm Flint, on one panel.<\/p>\n
Protectionism as applied to the automotive industry has long been perceived as almost shameful. Putting up tariff and other barriers was the preserve of emerging countries like Brazil, Russia and India as they sought to protect an uncompetitive local automotive industry from global competition.<\/p>\n
But now the rise of the Chinese and their global export juggernaut has brought Western car makers and the countries whose economies they support to the realisation that actually, compared with the Chinese, with their low cost-base, fast-evolving tech and state support, it\u2019s them that might be the uncompetitive ones.\u00a0<\/p>\n
But what to do about it? In a survey of automotive business leaders published by the SMMT to coincide with the Summit, more than 80% said they either agreed or strongly agreed that the UK government should \u201ctake a more proactive stance to protect the UK automotive sector\u201d from increased threats from global competitors.<\/p>\n
That view was voiced at the Summit by Carol Rose Burke, managing director of Unipart’s\u00a0manufacturing, engineering and\u00a0design division. She believes the UK needs\u00a0to make hard decisions to create a strategy to create more high-value jobs.<\/p>\n
\u201cWe need to be much more protectionist,”she said. “And I use that word provocatively, because we need to stop talking about why we can’t do something.”<\/p>\n
Burke\u2019s point was taken up by Paul Thomas, chief technology officer at Wrightbus, who said the\u00a0company takes pride in the fact that 51% of its buses’ components are sourced from the UK and the EU.<\/p>\n
Protectionism, he said, isn’t a dirty word:\u00a0\u201cIt’s not a new idea. There’s many other countries around the world that use protectionism, like Australia and Canada, and they still have competitive markets.”<\/p>\n
Protecting a local industry and supply chain reduces risk in a volatile world, argued Stephen Bennett, UK managing director of automotive control unit supplier Kostal.<\/p>\n
\u201cThe next Strait of Hormuz is not going to be the Manchester ship canal,\u201d he said, adding that car makers, and by extension governments,\u00a0need to recognise there\u2019s a monetary value in having suppliers close by and not the other side of the world.<\/p>\n
Exactly what form that protection would take, however, wasn\u2019t voiced. The UK currently hasn\u2019t applied its own version of the EU\u2019s \u2018countervailing\u2019 (ie subsidy-neutralising) tariffs on Chinese EVs and is showing no willingness to do so.\u00a0<\/p>\n
Despite the phenomenal increase in market share of the Chinese to around 16% of the UK car market in the first five months of this year, only Vauxhall has overtly called for an investigation<\/a> into \u201cinequities\u201d. The Vauxhall executive who made that\u00a0call has since left the company.<\/p>\n
The SMMT, which counts Chinese brands among its members, isn\u2019t about to file a complaint needed trigger any potential investigation into unfair practices. \u201cWe don’t have a clarion call from our members for any change,\u201d CEO Mike Hawes told journalists at the Summit.\u00a0<\/p>\n
Even if they did, they wouldn\u2019t find common ground with the Labour government. \u201cTariffs are a lose-lose,\u201d Peter Kyle, secretary of state for business and trade, told the Summit.<\/p>\n
The Conservatives also wouldn\u2019t follow the EU in applying tariffs on Chinese EVs. \u201cWe don’t advocate for protective tariffs or the erection of artificial non-tariff barriers,\u201d Andrew Griffith, Kyle\u2019s shadow, told the audience.\u00a0\u201cWe’ll compete on our own merits.\u201d<\/p>\n