THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS LIMITED PAGE 1
Nick Grout
BIS Automotive Unit
Automotive Industrial Strategy
SMMT Open Forum,
19 March 2014
Nick Grout,
BIS Automotive Unit
Industrial Strategy: government and industry in partnership
• Industrial Strategy: to give businesses the
confidence to invest.
• Key principles:
- Long term
- Partnership with business
- Whole of Government approach.
• 5 major themes: emerging technologies; access
to finance; skills; public procurement; supporting
sectors
An approach welcomed by business
• "What's critical is identifying where a long-term partnership between business and government can make the greatest difference when it comes to encouraging investment and boosting exports," - John Cridland, Director-General of the Confederation of British Industry (CBI)
• “Companies and sectors with the potential to deliver new technology and long-term growth in the economy will do it where there is a coherent, consistent and certain approach from government” – EEF
Industrial Strategy Sectors
Aerospace (March 2013) Aim: Maintain existing UK market share; secure UK employment
Life Science Strategy (Dec 2011) and one year on update (Dec 2012) Aim: To make the UK the global hub for life sciences
Nuclear (March 2013) Aim: Grow the global market share; set out role that nuclear plays in UK energy mix
Agri-tech (July 2013) Aim: increase inward investment and exports
Education (July 2013) Aim: Increase the UK's education exports
Information Economy (June 2013) Aim: to seize the opportunities from new ICT technology
Offshore wind (August 2013) Aim: Build competitive and innovative UK supply chain
Oil and Gas (March 2013) Aim: Increase inward investment in energy supply chain
Construction (July 21013) Aim: make the UK the global leader in sustainable construction
Automotive
(July 2013) Aim:
Investment in R&D;
grow and develop UK supply chain
Professional Business Services (July 2013) Aim: make the UK the global hub of expertise
Why Automotive?
• From 2002-12 the automotive sector accounted for an
average of 0.7% of UK GVA and 5.9% of UK manufacturing
jobs
UK automotive industry turnover in 2013 exceeded £60
billion (an all-time record, and 9% up on 2012).
Automotive exports totalled £31.5 billion in 2013 (9% up
on 2012 another all-time record), accounting for 6.3% of
UK's entire exports of goods and services.
Automotive Strategy –
“Driving Success”, July ‘13
- A shared vision for a
prosperous, globally
competitive and growing UK
automotive manufacturing
industry
- Automotive Council leadership
Over the past few decades the UK
automotive industry has been transformed
Headlines from Strategy:
• £6 billion investment from global
vehicle makers in the last two years
• UK 4th largest vehicle producer in
Europe – making 1.6 million vehicles
(one every 20 seconds), & 2.5 million
engines
• Over 80 per cent exported, to more
than 100 countries
The Strategy is framed around key
challenges and opportunities, with
an action plan to address these:
Innovation and technology
• Almost none of Europe’s new cars powered solely by petrol or diesel engines by 2040: a once in a lifetime technology change
Supply chain
• Domestic supply chain relatively weak – on average only one third of the parts in UK manufactured vehicles are sourced here: estimated £3bn opportunity if UK suppliers could compete better
Skills
• Concerns about a shortage of engineers & other skilled workers; need to build the talent pipeline
Business environment
• Strategic partnership is key to improve the business environment for the UK automotive sector, in a highly competitive global context
Strategy Actions and Priorities:
Technology – including £1bn joint investment in Advanced Propulsion Centre;
technology roadmaps
Supply chain – including establishing Automotive Investment Organisation,
access to finance cooperation framework agreed with the banks
Skills – high level “roadmap” for skills, to create “talent pipeline”
Business Environment – Establishment of new Automotive Council Group to
address, to cement the UK as a globally competitive place to do automotive
business.
Kick-starting the ULEV market: £500m HMG investment announced for 2015-2020,
building on £400m current investment; ULEV strategy published in September
- The Strategy is long term. Some actions are well advanced (e.g. APC, AIO), for
others workplans are more embryonic.
Automotive Council structures – strategy implementation
Automotive
Council
Technology WG Supply Chain WG Business Environment &
Skills WG
Workstreams:
- Skills
- UK international
competitiveness
- UK business
environment
- Europe (and trade)
Workstreams:
- Establish Advanced
Propulsion Centre
- Future technology and
R&D co-ordination
- Intelligent mobility
- Manufacturing
technology
-Energy storage (non-
electro-chemical)
-[Design]
Workstreams:
- Understanding supply chain
demand and capability
- Improving long term supply
chain competitiveness
- Satisfying supply chain
demand (though inward
investment by existing
suppliers or new entrants)
- Access to finance (w BBA)
- Innovative processes for
premium manufacturers
International competitiveness
Chair: Tony Walker,
Toyota
Skills
Chair: Jo Lopes, JLR
UK business environment
Chair: Gareth Jones,
ebm-papst
Europe
Chair: Andrew McCall, Ford
Business Environment
and Skills Group
Chair: Nigel Stein, GKN
Business Environment & Skills
Challenge / opportunity Response
Skills: Concerns about a
shortage of engineers & other
skilled workers; need to build
the talent pipeline
Industry consensus skills “road map” and action plan to
deliver this.
Business environment:
Strategic partnership is key to
improve the business
environment for the UK
automotive sector
Building evidence on the UK as a good place to do
automotive business; understanding policy impacts and
costs; maintaining and enhancing the UK’s flexible labour
market; engaging local enterprise partnerships (LEPs),
devolved partners and other local decision makers;
supporting UK influence in and on Europe; supporting key
free trade agreements.
14
Workstreams and priorities
Skills UK International
Competitiveness
UK Business
Environment
Europe
• Employer
Ownership Industrial
Partnership bid
• Apprenticeship
“trailblazers”
• Auto Council
scholarship scheme
• Attracting more
young people,
especially women,
into automotive
careers and to study
STEM subjects
• Exploring future
Employer Ownership
Fund opportunities
• Develop a
scorecard of the
UK’s international
competitiveness. To
include: tax;
incentives; labour
flexibility; energy.
• Interacting with
LEPs – established
an Automotive
Council LEP
Leadership Forum in
January 2014
• Predictability of
policy and regulatory
requirements and
incentives –
including ULEVs
• Public procurement
pipeline
• Making the UK
voice heard: in
setting standards; in
trade agreements;
and in the policy
agenda.
• Reviewing
mechanisms for EU
engagement.and
how to work together
for most impact.
• Reviewing
evidence on the
benefits and issues
for the automotive
sector of UK EU
membership
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