The UK auto industry continues to deliver on growth to turnover, exports and employment according to SMMT chief executive Mike Hawes.
Speaking to just-auto at a press briefing ahead of the launch of the latest SMMT report on industry sustainability, Hawes outlined the positive current picture for the UK’s auto industry as well as some challenges ahead.
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“Overall, it’s an encouraging picture,” said Hawes. “The sector is delivering growth in volumes, turnover and employment, while also reducing its environmental impact.”
The SMMT’s 16th annual Sustainability Report puts UK auto industry turnover at GBP69.5bn in 2014, up 6.6% on the previous year. Car production last year grew to 1.53m units and is forecast to be approaching 2m units a year by 2017 – a level that would overtake the current record of 1.92m units achieved as long ago as 1972.
“We are seeing plenty of investment and innovation,” Hawes said. “And it’s not just in passenger cars. Light commercial vehicles are a bright spot and so is engine production which will rise further as a result of new investments such as Jaguar Land Rover’s new engine plant at Wolverhampton.”
Hawes also pointed out that UK car producers are proving adept at finding new markets to sustain volume growth in the wake of lower demand in Russia, a key export market for a number of UK producers. “Car manufacturers are finding new markets for growth in Asia-Pacific, the Middle East and elsewhere and also benefiting from the gradual growth we are seeing in Western Europe,” he maintains. “And the significance for the UK economy is underlined by a big rise over the past decade in the average value of car exports and an increased presence in premium segments.”
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By GlobalDataHawes also says that the industry’s dialogue with the UK government via the Automotive Council continues to be positive. “We have already met with new Business Secretary Sajid Javid and he was very supportive and positive about the work of the Automotive Council.”
However, Hawes acknowledges that there are challenges ahead for the sector. “All eyes this week, of course, are on Greece,” he said. “Europe is a very important market for the UK’s auto industry, so maintaining a healthy European market is key to our continued success. The strength of the UK automotive sector has clearly been bolstered by being part of Europe.”
A survey of the SMMT’s membership conducted last year suggested that there is an overwhelming majority in favour of maintaining the UK’s membership of the EU, something that the new government has pledged to put to a referendum following a ‘renegotiation’. “While many in the UK’s auto industry back our continued membership, they also want reforms,” Hawes says. “The central point is to have European structures and a landscape that encourages business, trade and competitiveness.”
Other key challenges for the sector include air quality, tighter CO2 emissions and working to improve skill sets and fill training gaps. “It’s a fiercely competitive industry. We have to continue to work very hard to ensure the industry here is best placed to build, design and engineer the vehicles that will be needed in the future. Maintaining competitiveness and continuing to achieve that in a manner that is environmentally responsible – improving the environmental impact of the manufacturing process – to generate sustainable growth, is an ongoing challenge. However, the UK’s auto industry’s positive metrics are very encouraging.”
The SMMT’s Sustainability Report says that that the reports signatories (major UK vehicle makers and Tier 1 suppliers) reduced total energy use by 10.4% in 2014 over 2013 (with overall production flat) and by 39.1% versus 2000. The reduction was supported by a 15.1% cut in gas usage as companies moved to more efficient heating systems. On a per vehicle built basis, 2014 energy usage was cut to its lowest level ever, down 7.5% on 2013 and a staggering 48.1% on 2000. Water use in manufacturing per vehicle produced is down 49% versus 2000, while waste to landfill is 92% down.
See also: UK: Car output remains on the up
