UK automotive sector switching to fast lane

Posted on 10 Jun 2011 by The Manufacturer

The European Automobile Manufacturer’s Association (ACEA) met with Cabinet Ministers on Wednesday to discuss growing confidence in the sector.

Following announcements of multi-million pound investments from both Nissan earlier in May and BMW (producer of the iconic Mini) yesterday, Mr Cameron expressed his delight at the encouraging sustained growth of the industry: “I’m delighted that so many automobile manufacturers are actually bringing production and supply chain back to the UK.”

Credit has been given to the government by figures in the industry after Vince Cable and Chancellor George Osborne launched the next stage of the government’s Growth Review – setting out the new sectors and themes which could make a positive contribution to the economy while having the potential to drive growth in other areas too.

Mr Cameron hosted the ACEA meeting at Downing Street this morning, after which the car manufacturing association held their annual conference; the first time they have met in Britain. The ACEA represents a selection of the biggest truck, car bus and truck manufacturers in Europe such as Volvo, Fiat, Renault, JLR, Ford and Toyota.

He said yesterday that “we want to do everything we can to encourage that by reducing our rates of corporate tax and setting up the Regional Growth Fund, which is assisting a number of automotive companies. We are putting money into advanced manufacturing technology and innovation centres and expanding the number of apprenticeships. We really want to see the automotive industry flourish and we are determined to do the things to help it succeed.”

Today’s meeting is a clear step towards reaffirming the UK’s place as a leader in the automotive manufacturing sector worldwide. Mr Cable expressed his optimism at the conference: “Today’s conference in London shows the growing international recognition of our automotive industry and the interest in our national ambition to generate growth in the whole advanced manufacturing sector.”

“Car makers are boosting their investment in Britain. Nissan will design and develop the new Qashqai in the UK and BMW is building the new generation of MINI here as well as putting £500m into their UK manufacturing operations. [The decisions of BMW and Nissan to invest in the UK] show the strength and competitiveness of our automotive sector, the skills base that drives our economy and the ambition of the business community to secure long-term growth, which we are taking every available step to support.”

Mr Cable’s remarks come after the announcement by Lotus that it has been forced to make 99 workers redundant at its plant in Norfolk (see here). Although BMW and Nissan are able to invest and have made moves to do so, the rosy enthusiasm for the industry in Downing Street may be relatively misinformed.

300,000 people are employed in the automotive manufacturing industry, making it hugely important for the British economy. It accounts for 12% of total manufacturing employment in the UK. The sector is hugely important to the recovery, and in 2009 over £1.5bn was spent in the UK on R&D.

George Archer