TM interviews the chief executive of the UK's leading automotive trade association ahead of its June focus on the sector.
TM: You joined SMMT as CEO in September last year – What has been most exciting about taking up the role at this time and what has been most daunting?
I’ve been lucky to have been involved with the industry and the SMMT for a number of years now so I was familiar with the strong reputation the trade association has earned.
However, many parts of the organisation were new to me, so the challenge has been to make sure I’m up to speed with the myriad issues facing the industry – not just the passenger car sector but all parts of SMMT’s membership – commercial vehicles, bus, coach, trailer, the aftermarket and retail sectors and of course, the UK supply chain.
In terms of excitement, you can’t quite beat the buzz of live TV – fortunately, the news has been so positive about our industry at the moment.
TM: The turnaround in British car manufacturing since the recession has been remarkable – but how secure is it?
Billions of pounds of investment have been committed to UK automotive manufacturing in recent years which is testament to the long-term thinking of the global industry and the competitiveness of the UK as a place for investment.
Much of that investment has still to filter through to production volumes so growth opportunities are still there. The challenge is to ensure we can build and invigorate the supply chain around it – and to sustain the UK’s position as an attractive place to invest. Having a supportive Government and a sector strategy has been key and remains fundamental to our long term competiveness.
TM: Despite lots of positive headlines about a resurgent UK automotive sector in the UK the supply chain continues to face many challenges – particularly in finding finance for necessary tooling investments. What’s being done to address this problem?
From many meetings and visits, I understand how important this issue is to our members.
The SMMT has been working very closely with OEMs, suppliers, authorities and the financial sector to help address this problem and I believe we have been making progress. The banking sector now understands better the issues around tooling finance and there are an increasing number of financial products on the market.
However, I am under no illusions about the scale of the problem and more needs to be done to ease the financial constraints. We have held some workshops with the industry, financial sector and other stakeholders to move this forward, and we will run more through the year.
TM: Like many other industries, the automotive sector is struggling to grasp growth opportunities while having to compete for skilled workers in a diminished talent pool. SMEs in particular are finding it hard to compete with OEMs for qualified individuals – sometimes finding that talent is ‘poached’ by big names after they have invested in training. What would you say about this challenge?
Skills remain an industry-wide problem which is not confined to the UK.
We do have some acute issues and it’s been encouraging to see the work of the Automotive Council in this area, especially the identification of a ‘skills roadmap’ to improve the automotive skills pipeline. But much more needs to be done with the industry already investing in apprenticeships and vocational education to “grow your own”.
There will always be competition between employers for talent but the encouraging development is that OEMs and SMEs are increasingly working together to address these issues, with larger companies supporting skills and training within the supply chain where they can.
TM: The automotive sector is a strong export force for the UK – do you think this could be threatened were we to exit the EU?
In our recent report with KPMG, The UK Automotive Industry and the EU we examined the relationship between the UK and the EU as it affects our sector.
The results were clear; the UK’s membership delivers significant benefits for the industry.
The most obvious of these is the fact we have unhindered access to the largest single market in the world – reflected in the fact that 49% of UK-produced vehicles are exported to the EU without tariffs and within a single regulatory regime.
We also gain from the trade bargaining strength of the EU which has secured beneficial arrangements with the other global markets and appreciate the ability to move talent around European operations.
In our membership survey 92% of members felt that it would be better for their business to stay in the EU, albeit a reformed EU. That’s a clear mandate.
Automotive Sector Focus
See TM’s June issue for an Automotive Sector Focus including insight into Bentley’s new engine manufacutirng venture and an interview with Motosport Industry Association CEO Chris Aylett about potential location of new F1 team Haas’ operations.