Event review: SMMT Open Forum
The NAA attended the recent SMMT Open Forum event in Leicester, which provided an industry update as well as an insight into what lies ahead for the future of the UK automotive; here are some of the key points from the day’s busy schedule.
Summary of key points includes:
- UK automotive industry overview
- Automotive Investment Organisation update
- Growing The Automotive Supply Chain: The Opportunity Ahead
- Automotive 2025: Industry without borders
- APC Spokes
UK automotive industry overview
Mike Hawes, SMMT Chief Executive
The UK Automotive Sector – Key facts:
- £64bn turnover
- £12bn value added
- 1.6 million vehicles annually
- 2.4 million engines
- 80% of vehicles exported
- 770,000 jobs dependent on automotive
- 160,000 in manufacturing
UK top 10 best selling cars (2014)
- Fiesta: 131,254
- Focus: 85,140
- Corsa: 81,783
- Golf: 73,880
- Astra: 59,689
- Qashqai: 49,909
- Polo: 48,004
- 3 Series: 45,581
- 500: 44,005
- Juke: 39,263
UK automotive manufacturing strengthening
- 1972 peak 1.9m
- 2014 results 1.52m
- 2015 target 1.59m
- 2018 target +2.0m
UK car manufacturing output by site, 2014
- Nissan, Sunderland: 500,238
- Land Rover, Halewood & Solihull: 374,355
- MINI, Oxford: 178,993
- Toyota, Burnaston: 172,215
- Honda, Swindon: 121,799
- Vauxhall, Ellesmere Port: 77,836
- Jaguar, Castle Bromwich: 75,152
- Bentley, Crewe: 10,614
Automotive Investment Organisation update on improving the UK supply base
Lawrence Davies, Deputy CEO, Automotive Investment Organisation
Lawrence reported on investments in UK automotive, quoting a range of developments including that the new Vauxhall Vivaro has double the UK content of the previous model, that new jobs are being created throughout UK automotive manufacturing and the supply chain, and that the APC and the catapults are helping to drive growth. As well as increased inward investment, exports are also rising.
Latest OEM opportunities
Philip Davies, Automotive Analyst, Department for Business, Innovation and Skills
Growing The Automotive Supply Chain: The Opportunity Ahead
Published March 2015
As UK vehicle makers add new models and expand their output, so the opportunity for supply chain investment grows. Previous reports identified a £3 billion opportunity to re-shore tier-1 sales, together with an additional £2 billion re-shoring potential for the upstream supply chain to increase sales to the tier-1 community.
Since those reports were published conversations between vehicle makers, suppliers and Government have led to a number of new supply chain investments. Sales from UK suppliers to UK vehicle makers have grown by 19% through 2014, whilst sales growth at the UK vehicle makers was a more modest 5%, as the European market remains subdued. Through this period, UK vehicle makers have been investing in new products for European and global markets, putting in place the conditions for robust growth in coming years, and expanding the opportunity for investment in the UK supply chain.
The appetite for local sourcing remains strong, bringing the benefits of responsiveness and reduced logistics costs. Despite a steady flow of new supply chain investments, the opportunity afforded to suppliers by a growing UK vehicle industry has never been stronger.
This report refreshes the estimated tier-1 opportunity, taking account of investments already captured, but noting the expectation that UK vehicle output will grow to an estimated two million vehicles annually within a few years, and that those vehicles will be of higher value, requiring ever more complex and technically advanced components.
In summary, the potential tier-1 re-shoring opportunity is now estimated to be worth £4 billion annually over the next few years.
Growth opportunities for the sector overall include:
- Organic growth of the existing UK supply chain as vehicle production increases to two million vehicles
- On-shoring products currently imported through new investment
- Export growth for existing UK suppliers, and export opportunities for new investors
Automotive 2025: Industry without borders
Paul Smith, Associate Partner, IBM Global Business Services
‘Engage with consumers, embrace mobility, exploit the ecosystem’
- 73% of OEM executives rated mobility services as a significant area for co-creation with consumers
- 73% of all executives rated collaboration with other industries as the best opportunity for industry growth as we progress toward 2025
- 75% of all executives rated expect non-traditional industry participants to have a key role in the automotive ecosystem by 2025
- Greater expectations of co-creation: Industry executives expect more collaboration with the consumer
- Self-enabling vehicles will provide a greater personalized experience Intelligent and Intuitive enough to take care occupants and itself
- 73% of survey respondents expected that industry growth will come from collaborating with other industries.
UK Capability In Automotive Power Electronics And Battery Systems Boosted by Creation of APC Spokes
Tony Pixton, Chief Executive of the Advanced Propulsion Centre
Tony Pixton announced the creation of two new APC Spokes, pulling together highly focused communities combining business and academia to support the development of the UK’s low carbon propulsion capability and help to strengthen the automotive supply chain in key technology areas.
Each of the APC Spokes will be the centre of an open and inclusive network created to provide a focus for specific technologies and act as a conduit to the UK’s expertise and resources. The APC Spokes will bring together interested academic and industrial parties as a voice for the community to take the specific technology forward and to support the development of consortia to exploit funding opportunities.
Speaking at the event, Chief Executive of the APC Tony Pixton said:
‘The UK has a clear opportunity to build strong supply chains in low carbon propulsion technologies and the APC Spokes provide the mechanism for business and academia to work together in areas of common interest and leverage the significant resources available.
‘I am delighted to announce that the universities of Nottingham and Warwick have been selected through an independent process to coordinate the communities in Power Electronics and Electrical Energy Storage respectively, and they join Loughborough University in London which was announced last November as the coordinator of the Digital Engineering and Test Spoke.
‘Today’s APC Spoke announcement follows the recent Automotive Council report ‘Growing the Automotive Supply Chain: The Opportunity Ahead’ and shows how the UK automotive industry turnaround is boosting companies across the UK.’
The successful APC Spokes were selected following an assessment process undertaken by independent industry experts. The APC Spokes aim to provide open and inclusive access to expertise in specialist technologies, signposting and promoting UK capabilities whilst providing networking opportunities to build consortia. Each APC Spoke working with the APC team will develop a collaborative environment for the benefit of all interested parties. The APC Spokes will also help to develop the relevant technology roadmaps by providing input, through the APC, to the Automotive Council. These roadmaps represent a consensus view of academia and industry on future priorities for the Spoke technologies, and hence form the basis of the industrial strategy for the UK automotive industry.
Announcements about further APC Spoke locations will be made in the coming months.