The government has given the green light for a new competitiveness and productivity initiative for automotive manufacturers, is it enough to counter the severe impacts of Brexit on the industry?
Britain produces 1.7 million vehicles annually. Every 20 seconds a car, van, bus or truck rolls off a UK production line, with over 80% of these exported to over 100 countries.
It is a critical sector for the UK’s economy and to showcase Britain’s advanced manufacturing capability.
Earlier this week, the Department for Business, Energy and Industrial Strategy (BEIS) announced its selection of the National Manufacturing Competitiveness Levels (NMCL) programme as the vehicle to deliver the government’s UK-wide competitiveness and productivity improvement initiative.
Led and match-funded by industry, and with the backing of 25 of Britain’s largest manufacturers, NMCL, which forms part of the modern Industrial Strategy, has been jointly developed by the automotive and aerospace sectors for application across all areas of manufacturing.
But what does that mean?
The NMCL package’s chief aim is to boost the performance of Britain’s manufacturing supply chains in the automotive sector.
It is designed to improve competitiveness, raise workforce capacity and increase productivity of UK manufacturers, and if this is achieved then the nation’s exports and economic growth could receive a much needed boost.
How will this be achieved?
NMCL Automotive, delivered by The Society of Motor Manufacturers & Traders (SMMT), will make use of the £16m of government funding to develop sustainable and internationally competitive UK supply chains.
The new approach has already been successfully piloted by companies in the North West of England, according to NMCL.
The programme is designed to help manufacturers of all sizes and stages of development understand how competitive they currently are and develop the specific business capabilities they need to boost their performance.
The package includes an in-depth assessment based on company capabilities and the views of key customers. This data is then applied to investment decisions across six areas;
Quality, cost, delivery, flexibility, products/technology and customer experience
Projects are tailor-made for each manufacturer and focus on boosting productivity, increasing ‘value-add’ and winning more orders.
Automotive packages will typically last from six months for smaller initiatives to up to three years for entire business transformations.
At a good time
The past two years have seen a significant drop in investment, car sales and manufacturing, meaning the industry is not likely to meet its production target of two million cars by 2020, according to the SMMT.
Image courtesy of Jaguar Land Rover
Japanese car giant Honda announced in February it will close its manufacturing plant in Swindon in 2021, cutting thousands of jobs in the process and Ford warned that a no-deal Brexit would be “catastrophic” for its trade. Earlier this week, Jaguar Land Rover also begun its week-long factory shutdown as part of its plans for Brexit.
Companies surveyed by the trade association said that Brexit was costing jobs and the automotive sector’s competitiveness before the UK even exits; one in five automotive companies said that they had already lost business.
Is it enough?
The impacts of Brexit to the automotive industry have already been devastating, uncertainty has caused serious damage; car plants are enforcing temporary and even permanent shutdowns, investment has been cut and jobs lost.
However, SMMT chief executive Mike Hawes says that this programme is a “shot in the arm” and that it offers the automotive industry “a proven way for business to achieve competitiveness.”
Adding, “It is important that all manufacturers are alert to the technological, market and trading changes that are occurring and take the right steps to ensure they are not just viable but globally successful in the future.”