Originally posted on UKTI’s website – reproduced with permission

The UK automotive industry is enjoying new growth, with major investment announcements from leading international manufacturers.

Despite the pressures of the worldwide financial crisis, the UK’s automotive sector is enjoying rising production and export numbers. In fact, 1.39million vehicles were made in the UK last year; and, of these, 75 per cent of cars and 73 per cent of commercial vehicles were sold overseas.

In total, the UK exported £27billion of vehicles and parts in 2010 and has become one of the leading locations for engine production. Of the 2.4million units made in the UK last year, 72 per cent were exported.

The UK automotive industry is also supporting new innovation with financial backing, with substantial funds spent on research and development each year. Even in the recession, R&D funding rose by 9 per cent.

Typically achieving a turnover of around £50billion, the sector now employs over 700,000 people, and has an international reputation as a centre for world-leading engineers and top-class facilities. Plus, it has become a global focal point for low carbon technologies.

Confidence

Recently, positive manufacturing figures have continued to further boost confidence in the sector. In September, the Society of Motor Manufacturers and Traders (SMMT) revealed that UK car manufacturing was up 4.4 per cent, over the first eight months of 2011. Engine production, meanwhile, was up 4.8 per cent.

The SMMT also noted that the British automotive industry has attracted over £4billion of global investment in this year alone. John Leech, Partner in KPMG’s Automotive practice, noted that “these are particularly strong figures and underline the continued resilience of the UK automotive industry.”

This is why Vince Cable, Secretary of State for Business Innovation and Skills, has highlighted the automotive industry as a key driver of UK economic growth, pointing out that vehicles are now established as the country’s number one manufactured export.

In June, at a dinner with the Society of Motor Manufacturers and Traders, he said: “Many of the major auto companies recognise our strong track record in innovation, research and development and design. Eleven of the global volume manufacturers have bases here, backed by 19 of the world’s top 20 suppliers.”

Commitments

A string of automotive sector investment stories have reinforced this point in recent months. In February, McLaren Automotive’s first MP4-12C high-performance sports car entered into production at the McLaren Technology Centre in Woking. In March, Opel/Vauxhall confirmed Luton as the manufacturing site for the next generation Opel/Vauxhall Vivaro light commercial vehicle, which will enter into production in 2013.

In April, Aston Martin announced that its new city car, the Cygnet, will be produced at its facility in Warwickshire; while MG revealed that its new MG6 GT sports fastback will be designed, engineered and finally assembled at its facility in Longbridge. In May, bus and coach manufacturer Optare unveiled its new facility in Yorkshire with the capability to manufacture approximately 1,200 buses per year.

“We’ve seen major vehicle manufacturers making significant commitments to the UK,” says SMMT Chief Executive, Paul Everitt. “We’re in the fortunate position to be able to look ahead with a reasonable level of confidence that we have new products and new models coming into UK facilities.”

Investment

In June, German car-maker BMW announced an additional £500million investment in its UK production network over the next three years and confirmed that the UK will be a production location for its next generation MINI. Vince Cable hailed this decision as “a real tribute to the success of British automotive manufacturing.”

MINI is a huge success story for BMW, with 80 per cent of MINIs exported to 70 countries around the world. In total, £2.4 billion worth of BMW’s UK-made cars and engines — including MINI and Rolls-Royce vehicles — are exported each year, making the BMW Group a major UK exporter.

BMW Group, named by the Dow Jones Index as the world’s most sustainable automotive company for six years in a row, is also a major sponsor of London 2012. It will be supplying a range of vehicles for the games including bicycles, motorcycles and highly efficient diesel-powered cars, in order to meet the organisers’ challenging target of 120g/km of CO2, as an average across the fleet.

Also in June, Japanese auto giant Nissan announced that the company’s all new Nissan Qashqai is to be designed, engineered and built in Britain at the company’s Sunderland manufacturing facility — a £192million investment. President and chief executive officer of Nissan, Carlos Ghosn, revealed that “the plant will become one of the pillars of our zero-emission manufacturing.”

Nissan is also investing £420m in its Sunderland facility for the production of the 100 per cent electric Nissan LEAF from 2013, and in a new stand-alone facility to make lithium-ion batteries for both Renault and Nissan vehicles from 2012.

Milestone

Nissan celebrates a significant milestone in 2011: its 25th year of car production in the UK. The company opened its Sunderland facility in 1986 and has now manufactured more than 6.2 million vehicles and 12 different models, including the Nissan Bluebird, Primera, Micra, Almera, Note, Qashqai and Juke.

Said Carlos Ghosn: “The UK has been a cornerstone of Nissan manufacturing since 1986, with the Sunderland plant setting important benchmarks for quality and efficiency in Europe and around the world.”

“As the UK’s largest car plant, biggest car exporter, and soon battery plant… Sunderland is a beacon of Nissan’s exemplary leadership in manufacture, management and technology, which define a global car company in the 21st century.”

Nissan is also one of the founding companies in the UK’s new Talent Retention Solution (TRS), which will be looking to match a number of its forthcoming job opportunities with skilled engineers facing redundancy from the defence sector.

Skilled

In September, it was announced that Jaguar Land Rover (JLR) — a subsidiary of India’s Tata Motors — is investing £355million in a new Midlands facility. This has a particular significance for low emission engines.

Dr Ralf Speth, Chief Executive Officer, JLR, said: “As part of our long-term strategy for the JLR business, we will design, engineer and manufacture a new family of advanced engines. This is a major commitment for our company and we will produce these advanced, highly-efficient engines for future Jaguar and Land Rover models at a new facility in the UK.”

Meanwhile, Mike Wright, Executive Director, JLR, paid tribute to the “constructive and collaborative” support JLR has received from key partners, including the Government, trade union colleagues, Local Authorities, local MPs, and JLR employees.

Recently, it has also been announced that 2014 will see the return of a British motoring icon when Coventry-based specialist automotive group CPP Global Holdings will engineer, develop and build an all new Jensen Interceptor at its planned new headquarters in the West Midlands. “This work is at an advanced stage and — married to CPP’s expert coach-building, craftsmanship and engineering skills — the new Interceptor will be an exceptional example of British automotive excellence,” said Brendan O’Toole, founder and co-owner of CPP.

Strategy

Government and industry have been working closely together to boost international investors’ confidence in the UK automotive sector. “Together, Government and industry outlined a longer-term strategy for the UK-based automotive industry and how it could compete in the global marketplace,” says Paul Everitt. “Part of that meant focussing on low carbon vehicles, high value and skills, and export-led development.”

Government’s close relationship with industry is signified by the work of the United Kingdom Automotive Council, which was established in 2009. “This is a joint, high-level strategic group, chaired by Secretary of State Vince Cable and Industry Chair, Richard Parry Jones,” says Paul Everitt. “It has three areas of focus: technology, and ensuring the sector is attracting investment into new technology; the supply chain; and communication.

“It’s important to tell people what is going on in the UK industry and to show them what an attractive proposition we have here.

“We have recovered sooner and quicker than anticipated from the recession; and the investment we have seen flow into the UK puts us in a very strong position.”