SMMT chief executive, Paul Everitt, says last week’s report identifying GBP3bn (US$3.9bn) of potential for UK supply chain firms is probably “an underestimate.”
The report – compiled by KPMG – notes the UK’s “diverse mix of models” and the country’s resilience to eurozone weakness – has made it an attractive destination for overseas investors.
“It is definitely a realistic proposition – if anything GBP3bn is an underestimate because this is based on what vehicle manufacturers say they want to process now,” Everitt told just-auto at last week’s Paris motor show.
“It does not include future model programmes or future growth in production or indeed anything that might be associated with aftermarket. It is a pretty solid number.”
The SMMT chief executive noted there was around an “18 month window of opportunity” for UK suppliers to capitalise on the relatively benign automotive environment in Britain and as manufacturers look to make “strategic decisions” to source more locally.
Everitt also praised the UK government for its role as “honest broker” in attracting both manufacturers and suppliers to the country – a position echoed at last week’s Paris motor show to just-auto from bodies as diverse as the Scandinavian parts makers association, FKG and the European supplier organisation, CLEPA.
“If people want to access these opportunities, they can contact government at the Department for Business…who help make contacts,” said Everitt. “The government has this manufacturing supply chain initiative which allocates GBP125m for research and development and skills.
“We think this needs to be extended – it is a one-shot thing – but we would like to see similar things in the future of course. The GBP125m – they have had two rounds of bidding so far and that – as far as we know – is it.”
The SMMT chief also highlighted the UK government’s intention to change the R&D tax credit system to an above-the-line process. Currently, the system allows companies to offset R&D spend against corporation tax, but an above-the-line approach is “effectively a straightforward credit,” according to Everitt.
“If you spend GBP100m on R&D, you will get GBP10m back from the [British] Treasury,” he said. “It makes doing R&D in the UK cheaper than it otherwise would.”
Everitt praised the way in which despite a change in UK government two years ago, the SMMT had not witnessed any seismic upheavals in automotive policy from politicians.
“We have been very fortunate in that we have had a change of government where we did not see a change of policy,” he said. “And a change of Minister [to Michael Fallon], he is genuinely focused on what needs to be done.”
Everitt added he was with Fallon last week as the British Embassy in Paris took advantage of the motor show to showcase opportunities in Britain to overseas organisations.