Government support of the UK Automotive Council will be key to reshaping the industry as it emerges from recession, the Society of Motor Manufacturers and Traders (SMMT) has said.

Addressing media at the SMMT's 2010 Test annual event at Millbrook proving ground, chief executive Paul Everitt outlined why he felt political help was crucial in the council, particularly with regard to low carbon development.

The UK now has a coalition government following the recent general election - with the Conservative and Liberal parties sharing power.

"I think there is general recognition in the government - both the previous and current ones - that we need to do things differently," said Everitt.

"The UK Automotive Council led by Vince Cable [business secretary] and Richard Parry-Jones [former Ford chief] - is a strategic partnership to plan for the long term to ensure the UK can exploit the transition to a ultra-low carbon cars and vehicles.

"We are an industry in the UK that relies on investors from other parts of the world, so we need to make the UK attractive to inward investors. What we sense is that, with our help, the UK government has developed a fairly coherent proposition for ultra-low carbon technology."

Everitt cited a raft of low-carbon UK projects that were either being planned or happening as evidence of the country as a centre for alternative energy development.

The SMMT boss said evidence of the UK's manufacturing capability was clear in the Nissan Leaf EV battery and car production venture in Sunderland, Ford's GBP450m (US655m) investment, Toyota's Auris hybrid production and GM/Vauxhall's Ampera project.

Everitt also noted more producers were looking to increase their sourcing in the UK.

"A number of manufacturers are looking at transport costs and it makes more commercial sense to have parts assembly closer to vehicle production," he said.

Extended production chains are more vulnerable," he added noting the recent eruption of the Icelandic volcano had caused difficulties for many manufacturers reliant on just-in-time processes.

British workforce flexibility is also becoming increasing attractive as Europe slowly starts to emerge from the recent global downturn, said Everitt. "In the UK, we have been able to scale down and scale up our workforce because of our flexibility and strong relationship with trade unions," he said.

"[This] gives us a competitive advantage. Other European countries have more difficult industrial relations."

Everitt acknowledged the UK automotive sector had undergone seismic problems of a nature "that we have ever possibly faced as an industry in the last 50 years," but that he remained optimistic the sector would emerge stronger.

"There is clear recognition the economic model that has persisted in the UK has now broken," he said. "Growth drivers will be industries that design and manufacture goods and services we can sell not just to ourselves but to businesses around the world.

"We have huge potential in technology and design engineering, but we need some help from the government. If we are successful we will generate wealth and jobs."