Over-regulation threatens to cloud a bright future for companies in the automotive sector and could see more production moving east. That's the central theme in Automotive Manufacturing 2006 - the industry perspective, SMMT's fourth issues survey which pooled the views of more than 100 senior executives.

The latest warning from the UK industry, follows publication of last year's 'CARS21' (Competitive Automotive Regulatory System for the 21st Century) report in Europe. This pointed to the effect that inconsistent and conflicting regulatory objectives were having on European competitiveness.

Recommendations were made to streamline rules and limit the cost burden to the auto industry. The SMMT says it fully endorsed these recommendations, and urges the UK government to follow these principles.

"Automotive manufacturing is alive and well and has a bright future," said SMMT president Roger Putnam.

"Productivity has improved, the skills gap is narrowing and business prospects are promising. However, the spectre of over-regulation looms threateningly. Government must heed our concerns and avoid the temptation to regulate Britain's largest manufacturing sector out of existence."

Among  the findings from the SMMT survey:

  • Eight out of 10 companies are optimistic about medium term growth;
  • Nearly half warn of imperative to move production to low-cost markets;
  • Fewer companies report problems recruiting skilled employees, but Level 3 skills remain most elusive;
  • Nine out of 10 companies say costs will increase significantly in the next five years, through regulatory overload;
  • 93% believe government is not as committed as it should be to Britain's largest manufacturing sector.

Published at SMMT's Annual Dinner, results were based on views from companies across automotive manufacturing. Respondents represented vehicle manufacturers, component suppliers and companies operating in the aftermarket.

Automotive Manufacturing 2006 - the Industry Perspective is now available to download free of charge from www.smmt.co.uk.

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