JULY/AUGUST 2019 AUTOMOTIVE
BUCKING THE TREND
As one of only a few sectors to have gone against the grain in terms of
production decline, the automotive industry has a few secrets to its success
BY MIKE DICKINSON, GENERAL MANAGER FOR THE AUTOMOTIVE SECTOR, INDUSTRY FORUM
The Index of Manufacturing, reflecting
movement in the volume of production,
is now close to returning to its early 2008
level due to the strong performances of
just four industries: food, motor vehicles,
other transport equipment and repair of
machinery. Together, these industries account for
just 30% of the manufacturing sector’s total weight,
yet they have provided 86% of growth in the sector
over the last ten years.
From 2012 to 2016 the automotive sector
contributed as much growth during this period
as the next five best performing industries
combined. Bookended by a prolonged contraction
and by the sterling depreciation around the time
of the EU membership referendum in June 2016,
the manufacturing sector grew by 0.97% during
this time, mostly due to contributions from the
automotive industry.
How did the automotive industry do it?
Prior to the 2008 recession, there was industrywide
recognition that the automotive industry
was hitting a slump. It was the beginning of
the economic crisis; consumers were reluctant
to spend, and volumes were slipping. The
government at the time recognised the need
to support manufacturing, and asked industry
leaders what could be done to specifically support
automotive industry growth.
The result, in 2009, was the Automotive
Council: an industry, academic and government
collaboration established to develop, guide
and implement a strategic framework for the
automotive sector. It was tasked to create a
transformed business environment and make
the UK a more compelling investment location.
It has wide-reaching strategic initiatives and
workstreams, including business, environment,
infrastructure, technology and supply chain
competitiveness.
Independent body (and Automotive Council
member) the Society of Motor Manufacturers
and Traders (SMMT) acts as a third-party arbiter,
allowing discussions to be non-competitive,
and existing solely to support and promote the
interests of the UK automotive industry both at
home and abroad.
In short, the automotive industry has brought
together all of the power players and aligned
directions and goals. It’s looked at the industry’s
overall strengths and the key factors affecting it,
such as digitalisation, Industry
4.0 and blockchain, and brought
it all together. We don’t see
other industries working at this
consolidated level – and maybe
it’s time they did.
Driving future technology
Ensuring the UK is at the heart
of future technologies has been
a key focus. Having carried out
a review into accelerating the
transition to the manufacture
of ultra-low and zero
emission vehicles, the UK has
strengthened its position on
motors and electronics and
focussed on skills requirements.
Various technology roadmaps
have been created.
The Faraday Battery
Challenge – a four-year,
£246 million investment into
research and innovation of
battery technology – has also
been born. In January 2018,
the Automotive Council and
Newcastle University’s School
of Engineering also hosted
a two-day workshop, which
resulted in the creation of
consortiums to overcome R&D
challenges highlighted in the
Electric Machines Roadmap.
Improving supply chain
competitiveness
The UK automotive industry
strategy has recognised the
contribution of the supply chain
to overall output and has put in
place initiatives to increase the
sourcing of UK content in UKmanufactured
vehicles.
The group’s competitiveness
workstream involved a
collaboration with government
to understand what the supply
The Index of Manufacturing over the last decade (Q1 2008 to Q4 2018)
Index of manufacturing
Other transport equipment
Motor vehicle
Food
Repair of machinery
Other manufacturing
Wearing apparel
Non-alcoholic beverages
Computer electronics
Textiles
Paper & paper products
Furniture
Alcohol & Tobacco
Wood & wooden products
Chemicals
Other non-metallic products
Coke & petroleum
Rubber & plastic
Electrical equipment
Fabricated metal
Basic metals
Printing & recorded media
Manufacture of machinery
Pharmaceutical products
-4 -2 0 2 4
Source: ONS, manufacturing sector performance, UK: 2008 to 2018
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