International trade regulations in the Automotive sector

Key drivers in the automotive sector

Research and development to decarbonise cars, vehicles and the fuels they use is the single most important driver for the sector. This comes as countries and governments work towards reducing their carbon footprint by using new technologies and ever more stringent standards to reduce emissions and other environmental pollutants such as noise.

The sector also benefits from government support for low-carbon vehicles including:

  • an exemption from company car tax for electric cars from 2010
  • a 100 per cent first-year allowance for electric vans
  • a further £30 million investment in low-carbon transport projects

Global harmonisation and economies of scale are also key drivers. It is widely considered that the global car manufacturing industry has reached over capacity in traditional vehicles in existing markets. Manufacturers are now looking towards emerging economies under a system of type approval that will allow any vehicle to be sold in any market under a single set of harmonised global technical regulations. To this end, European Union type approval regulations are being aligned with the global United Nations Economic Community for Europe agreements of 1958 and 1998 to ensure a single standard incorporating high levels of safety, environmental protection, energy efficiency and anti-theft mechanisms. For more information, see the page in this guide on type approval for vehicles.

General safety and personal protection - demands for higher standards in protecting both persons and property mean that investment in new and enhanced electronic devices makes up an increasing proportion of vehicle value.