Making the UK the Best Place to Invest in Low Carbon Vehicles (Reflection and Delivering on the Potential)
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2 Making the UK the Best Place to Invest in Low Carbon Vehicles (Reflection and Delivering on the Potential) Tony Harper Head of Research 10 th September 2014
3 Why is UK LCV capability important? Advanced manufacturing creates high value, highly skilled jobs, boosts exports and enhances long-term economic growth. It drives economic activity amongst large and small companies. It is a sector that most of the world s economies wish to lead.
4 The UK Auto Industry suffered from a series of closure and job losses in the early 2000 s Indirect job losses estimated at 95,000 DATE ANNOUNCEMENT JOB LOSSES May 2000 March 2000 March 2003 Ford announced car assembly at Dagenham would cease in 2002, ending 90 years of Ford UK passenger car manufacturing BMW announced the break-up of the Rover group. It retained the rights to the mini marque, while selling Land Rover to Ford Vauxhall s Luton car assembly plant closed which left Ellesmere port as the sole Vauxhall assembly plant remaining in Britain Indirect Indirect 2,000 Dec 2004 Jaguar closes browns lane plant in Coventry 1,100 April 2005 MG Rover went into receivership having spent the early 2000 s unsuccessfully investigating possible joint ventures April 2006 Peugeot closed its Ryton plant and moved 206 production to Slovakia 1,000 6,000 May 2006 Vauxhall announced loss of jobs from Ellesmere port, part of significant worldwide staff reductions by GM 900 Total Direct Job Losses: 11,000 Total Indirect Job Losses 95,000
5 UK balance of trade/various sectors m The policy adopted by successive Governments was to promote services Manufacturing viewed as sunset sector with no future Key UK Challenges: Government ambivalence towards automotive sector & manufacturing in general - absence of consistent long term strategic policy framework Shortage of sufficiently skilled workers shop floor and R&D Hollowing out of supply chains with little technology development/r&d capability Poor Industrial relations Lack of global volume vehicle manufacturers headquartered in UK Lack of manufacturing critical scale (1.7m v 4-8m France, Germany, Japan) Historically high interest rates and strong currency Lack of orchestrated collaboration among manufacturers & Tier 1 s Services Manufacturing Source: An Independent Report on the Future of the Automotive Industry in the UK
6 Key element in recovery was joint Industry/Gov Innovation Growth Team that worked together to deliver a consensed future vision New Automotive Innovation and Growth Team (NAIGT) set up in 2008 Over 80 senior people - automotive companies, Government Departments, Public Sector Agencies, Trade Unions, Universities, Consultancies etc Develop recommendations to help secure the future of the industry High level of engagement Many workshops with professional facilitation Consensus on key issues and opportunities defined Expert groups formed to provide solutions/recommendations Initial actions/output: Consensus roadmap on low carbon technology rollout Focused R&D agenda for Academia/Industry collaboration UK Automotive Capability Study Source: An Independent Report on the Future of the Automotive Industry in the UK
7 The Technology Group delivered strategies & priorities for 5 focus areas critical to delivery of future products Internal Combustion Engines Electric Machines and Power Electronics Energy Storage and Energy Management Lightweight Vehicle and Powertrain Structures Intelligent Mobility Most effective short term route to CO 2 reduction UK has all the necessary elements of the supply chain Focus on efficiency & integration with e-machines UK excellence in fundamental technology around power electronics and electrical machine design Focus on supply chain development UK has fundamental research ability in battery chemistry, flywheel technology and capacitors Initial focus on prototype material scale/pilot line facilities UK expertise in lightweight aluminium/steel vehicle technology, motorsport/niche technology & manufacturing Focus on exploiting further strengths in UK Aerospace sector Wide range of UK stakeholders and capability in Intelligent Mobility & Systems ~ Off-Highway sector particularly strong Link & support to UK Transport Systems Catapult Source: UK Auto Council
8 A whole host of partners have developed and grown their UK LCV capacity & capability over the last 6 years through collaborative projects with JLR alone.
9 Low Carbon Vehicles Innovation Platform the key numbers: 194 Projects funded 14 Competitions so far 206m of Government investment Over 400m of investment in Low Carbon Vehicle technologies 31 Universities engaged LCV IP 81.2m coinvestment from The Office for Low Emission Vehicles 288 unique industry partners
10 UK Automotive sector turnover now over 60bn with exports of nearly 30bn UK Automotive productivity now highest in Europe 2013 was a record year in the UK with a total sector turnover of 60.5 billion. Total turnover was up 10% on 2012, with growth mainly coming from export sales, which were up 19% at 29.4 billion Strong growth in UK auto sector productivity in the last decade Latest available data shows that UK overtook Germany in 2011 UK now has highest auto sector productivity of any nation in Europe Just ahead of Germany 65% ahead of France and Spain. GVA/employee K/head United Kingdom Germany Spain France Italy Czech Republic Poland
11 But
12 Making the UK the Best Place to Invest in Low Carbon Vehicles Fundamental Research Applied Research Development Manufacturing EPSRC TSB RGF/AMSCI APC s Add NEW INVESTOR BUDGET INCREASE TSB BUDGET to 100m/yr from 20m TSB FUND FOR NEW FDI BOOST APC FUNDING: to 1bn from 500m over 10 yrs Recognise STRATEGIC IMPERATIVE of ULEV supply chain. SUPPLEMENT FUNDS to: a)secure ULEV supply base b)support compliance, protect jobs Process FOCUS EPSRC support Align towards INDUSTRIAL POTENTIAL Add NEW INVESTOR/ FDI PROCESS Align TSB process towards strategic and nimble INDUSTRIAL POTENTIAL Add NEW INVESTOR/ FDI PROCESS FORWARD BUDGETS /R&D Roadmaps SCORE ULEV investments on STRATEGIC IMPERATIVE Recognise different Job: ratio Gaps - More Govt-Industry work needed on taking Tech/SMEs to Component Development & Manufacture - Allow STRATEGIC CONNECTIVITY of Govt Support - Utilise Bodies such as AIO & UKTI 1 Stop Shop - URGENTLY ADDRESS KEY ENGINEERS SHORTAGE support increased grad & post-grad training
13 Conclusion In 2008 the UK Automotive Industry was in severe distress. Government s view of Manufacturing in general and Automotive in particular was ambivalent at best with many writing it off as a Sunset Industry. There have been many factors contributing to the turn-around in the last 6 years but one of them is certainly the consensus and collaboration resulting from the NAIGT & Automotive Council. Collaborative projects focused on the common future challenges and opportunities have begun to build a significant capacity and capability in the UK. We have a major opportunity in front of us (in the next 6 years) to become truly worldclass and reap significant economic benefits BUT we need 3 Major Shifts: Globally competitive investment in R&D Urgently address the skills shortage A Government machine that is configured to deliver sustained Advanced Manufacturing growth. We look forward to spending the next 6 years helping the UK fully deliver on it s potential.
14 Thank you
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