Over-regulation could force production east, motor chiefs warn
Headlines from SMMT’s fourth survey of auto industry chiefs:
* Eight out of 10 companies are optimistic about medium term growth
* Nearly half warn of imperative to move production to low-cost markets
* Fewer companies report problems recruiting skilled employees, but Level 3 skills remain most elusive
* Nine out of 10 companies say costs will increase significantly in the next five years, through regulatory overload
* 93 per cent believe government is not as committed as it should be to Britain’s largest manufacturing sector
Over-regulation threatens to cloud a bright future for companies in the automotive sector and could see more production moving east. That’s the central theme in Automotive Manufacturing 2006 – the industry perspective, SMMT’s fourth issues survey which pooled the views of more than 100 senior executives.
The latest warning from the UK industry, follows publication of last year’s CARS21* report in Europe. This pointed to the effect that inconsistent and conflicting regulatory objectives were having on European competitiveness. Recommendations were made to streamline rules and limit the cost burden to the auto industry. SMMT fully endorsed these recommendations, and today urges government to follow these principles here.
‘Automotive manufacturing is alive and well and has a bright future’, commented SMMT president Roger Putnam. ‘Productivity has improved, the skills gap is narrowing and business prospects are promising. However, the spectre of over-regulation looms threateningly. Government must heed our concerns and avoid the temptation to regulate Britain’s largest manufacturing sector out of existence.’
Some of the key statistics are presented below and, where relevant, compared with results from previous years:
|
|
2003 |
2004 |
2005 |
2006 |
|
Our business prospects are good in the next five years |
74% |
81% |
84% |
82% |
|
Legislation has significantly increased costs in the last five years |
|
|
93% |
89% |
|
Legislation is likely to increase costs significantly in the next five years |
92% |
95% |
91% |
91% |
|
Transport infrastructure is unlikely to improve in the next five years |
|
|
84% |
84% |
|
To remain competitive, production must move to low-cost markets |
53% |
50% |
56% |
46% |
|
Level 3 skilled people are the hardest to recruit |
45% |
54% |
25% |
33% |
Published at SMMT’s Annual Dinner, results were based on views from companies across automotive manufacturing. Respondents represented vehicle manufacturers, component suppliers and companies operating in the aftermarket.
Note:
The high-level CARS21 (Competitive Automotive Regulatory System for the 21st Century) report was published in October 2005. Set up by Commission Vice-President Günter Verheugen, the group published 18 recommendations, including principles for better regulation.
CARS21 called for a new approach to policy-making based on proper impact assessments, consistent policy objectives, technology-neutrality, cost effectiveness, thorough consultations, lead-time needs and affordability.
Membership of the high-level CARS21 group included representatives from the automobile industry, European Commissioners, national government representatives (UK – Margaret Beckett, secretary of state for Environment Food and Rural Affairs), trade unions, NGOs and vehicle users.
Click below to download the full report.
