Q&A with SMMT’s chief executive, Chris Macgowan
The UK automotive industry's trade association, The Society of Motor Manufacturers and Traders (SMMT), looks after the collective interests of its company members and also organises the British International Motor Show, held this year in London. The SMMT's chief executive, Christopher Macgowan, spoke exclusively to just-auto editor Dave Leggett just ahead of the London Motor Show. This extract is from an interview originally published in full in the Lotus Engineering newsletter proActive.
DL: Most of the big international auto shows have a central appeal or reason for existence; Frankfurt to showcase the German manufacturers, Paris for the French, Detroit for the US Big Three, Tokyo for the Japanese, Geneva a neutral alternative for Europe. Given that the UK effectively lost the last remnants of its indigenous volume car manufacturing industry with the demise of MG Rover, where exactly does a British Motor Show fit in?
CM: A British Show fits in in two ways. Firstly, London as a city has huge pulling power. It is still one of the top attractions globally, so anything that happens in London has a head start. That's one area. And the second area that differentiates the London show from others is that the consumer is at the heart of all our thinking. What we are trying to do is give the visitor a rattling good day. It is very much focussed on a rattling good day out where the cars are the stars but the consumer is just behind in the league table.
DL: Why do you think that London is a better venue for the British Motor Show than [previous venue] Birmingham's NEC (National Exhibition Centre)?
CM: The NEC venue was a good venue for many, many years, but the manufacturers decided to reassess the NEC for two reasons: the cost of exhibiting and the cost of being a visitor to the NEC. Those two things, manufacturers felt, were getting way out of kilter.
So a beauty parade was held and the decision was taken to move the show to London's ExCeL. ExCeL had two winning elements to its bid. Firstly, the cost issues were addressed and secondly, it meant the show would move to London and manufacturers felt that if the show was to be moved at all, it needed to be a decisive move. That turned out to be London, but we didn't set out to move it to London. London offered the better deal.
Now we are beginning to realise just what a huge pull London is. My office is in London and I am constantly aware of the huge number of tourists the city attracts and the special place that London has in the hearts of so many people. We are seeing that reflected in advance ticket sales and also - because London is such a major centre of fashion and an economic centre - manufacturers have also decided that they want to exhibit and launch new product at the show; it is London and it is July. And that is something that separates out this show from Birmingham, enormously.
DL: Are you happy, then, with the response of the UK auto industry and its support for the London Show?
CM: Yes, I am. I am enormously comfortable with it. It is demonstrated in several ways. Firstly, a show of this sort has to stand on its own merits in terms of being a viable and attractive show. We don't have the advantage that our colleagues in say, France, Germany or perhaps Japan have, i.e. they can appeal to a very clear national interest in terms of their national manufacturers. We have to have a show that stands up on its own two feet, on its merits. The shape of this show clearly does and I'm really pleased with the response and, without being complacent, I think we are up for a very, very good show.
DL: It certainly does look as if the premiere count is well up on the last Birmingham show, but what do you think are the key factors that sway some manufacturers to premiere models at London rather than other international motor shows?
CM: Well, I think the time of year has helped. July is well away from Geneva or the autumnal Frankfurt/Paris slot in terms of Western Europe, so the timing is very helpful.
Secondly, we may not have an indigenous volume car making industry here, but we have lots of brands being built here - more brands than any other EU member state. If you couple that diverse manufacturing aspect with the size of the UK new car market, the second largest in Europe, the net result is that those men and women with responsibility for a brand in Britain say, 'hang on, we'd like to have that model previewed or launched in London, as this will help our marketing plans'.
DL: Are visitor numbers a key measure of the show's success and how many visitors are you expecting?
CM: I think they are a key measure. I must tell you though that I am not impressed with some shows that announce visitor numbers on the opening day. That seems a little disingenuous. We know what figure we are going for - we want 400,000 properly audited visitors. None of the other shows are properly audited so their figures are exaggerated because they include all sorts of weird and wonderful double entries and exhibitors and so on. Being typically British we audit ours. We are confident that we will get 400,000 audited visitors [editor's note - it turned out at 420,000] and if we do, we will be very happy with that.
You might say that that doesn't shape up too well against 1.2 million in Seoul and I wouldn't want to cast doubts on the figures of another exhibition, but you have to recognise where we are in the loop. Getting people to any public attraction in the UK requires great skill. The days of just opening the doors and saying 'here's the motor show' - well, those days are gone. They can do it in some countries - they can do it in Paris, for instance. They just open the doors and say 'here we are' and hundreds of thousands of people pour in. But in Britain it is highly competitive. You are looking to see if you can attract that family's fifty quid and that's why we have to have a rattling good show.
DL: And how important is the automotive trade element to the London Show?
CM: Oh, it is hugely important and I am well aware of the needs of that side of the show too. The show is, in a sense, a collection of parts that together add up to a brilliant show. For instance: to what extent do you think that the rock concerts in the evening are important? Well, you may think that that is a trivial sideshow. On the contrary, Londoners love doing things in the evening and concerts in the evening are exactly what they want and it gives them free entry to the show after 4:00pm. Brilliant marketing initiative and it will work well.
DL: Turning to the UK auto industry, how do you see the state of the UK auto industry currently, particularly in the context of the failure of MG Rover last year, PSA's decision to shut Ryton next year and Vauxhall's Ellesmere Port facility losing a shift?
CM: Well, the way I see it is like this. Our strongest card is that we don't believe in protectionism. The UK, politically, and the auto industry within the UK, does not subscribe to any form of protectionism. Therefore, the UK stands up on its own merits. We have a huge number of brands being built in Britain. But obviously I am enormously saddened by the decision of PSA to close Ryton in 2007; I am also hugely saddened by the collapse of MG Rover and the human casualties - redundancies - there; of course I am and it would be foolish to imply otherwise.
But, you can't have it both ways. You can't have, on one hand, an open market where you are attracting investment and then on the other hand, act in a protectionist way when difficulties come along. So, in France for example, when foreign interests wanted to buy the Danone yoghurt company they decided it was a 'national treasure' and needed to be protected. That's fine, but we don't have that attitude here in the UK. The London Stock Exchange could even be sold to foreign ownership. That's the way we are.
I'm saddened, naturally, by auto industry closures in Britain but I am not downcast about it because I know that the UK has a strong manufacturing base and it has that base on merit and merit alone. I know that other jobs will be created - look at the way we are moving into engine and transmission manufacturing, added value manufacturing that we are so good at.
We can't have it both ways. If I get all uptight about someone who decides to move offshore that is really not very helpful because at the same time we are looking to attract new manufacturing and expand existing manufacturing activity.
DL: Do you believe that the auto industry in Britain - vehicle manufacturing and the supplier sector - is seriously threatened by the emergence of low-cost competition in central and Eastern Europe?
CM: The answer to that question has to be yes, of course, we are threatened. But, we have to view this in a global sense. And we're back to the subject of the extent to which we plan to protect things. I know, for instance, that some of the low-cost countries that have attracted manufacturing and will continue to do so are not quite as low-cost as many people originally assume. There are wage pressures, inflation pressures and there are skills issues. So, one has to be cautious about saying that automatically, these countries are inherently more able to hold on to manufacturing jobs than say, Germany, France or the UK.
But what's the point of saying that there's nothing we can do about the threat? On the contrary, the way in which we work in this global market is important and the UK has a long history of working with many partners and I'm sure we will do that when it comes to India and China, in particular.
This extract is from an interview first published in full in the July/August issue of the Lotus Engineering newsletter proActive. The complete transcript is now available to just-auto members. To download click here.