• In Summary
  • Economic performance
  • Environmental performance
  • Supply chain
  • People and communities
  • Future vehicles and technology

2015 Automotive Sustainability Report – The 16th edition

SMMT’s 16th Sustainability Report looks at the economic, environmental and social impact of the automotive industry in the UK and highlights the significant progress achieved across the sector in 2014. The UK automotive industry continues to improve resource efficiency, boost output, invest in people and lead the decarbonisation of road transport.

What is sustainability?

Sustainability is achieving the right balance of economic progressenvironmental care and social responsibility.

Another widely-cited definition from the 1987 Brundtland Report states, “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.

UK automotive industry in summary

Summary 1

Report signatories (brand)

 

Front cover

 

Click through to download the full 2015 Sustainability Report.

Download previous editions of the Sustainability Report

Download data sets from 1999-2015

 

 

 

Economic performance

A growing UK market, supported by economic growth plus strong exports, helped the UK automotive industry increase turnover to a record £69.5 billion in 2014. Signatories also reported a 4.0% rise in turnover in 2014.

Economic performance 1

UK automotive manufacturing

UK vehicle production edged up 0.1% in 2014 to 1.6 million units.

Car output rose by 1.2% to 1.53 million units – its highest level since 2007.

Growth followed increased output for the buoyant domestic market, but exports still represent some four out of every five cars produced in the UK.

Read more about UK automotive manufacturing.

 

 

 

 

Economic performance 2

New vehicle registrations

The new car market rose 9.3% in 2014 to its fourth highest annual total ever, and the best since 2004.

Commercial vehicle (CV) registrations rose 10.8% in 2014 to 336,590 units, and just 7% shy of the 390,000 unit market seen pre-recession. The growth in 2014 was led by an 18.7% rise in light commercial vehicle (LCV) registrations.

Registrations of alternatively-fuelled vehicles (AFVs) rose by 58.1% in 2014 to 51,739 units.

Read more about new vehicle registrations in the UK.

Click through to download the full 2015 Sustainability Report.

 

 

 

Environmental performance

 

The automotive sector takes its environmental responsibility very seriously. While the vast majority of the life-cycle emissions associated with a vehicle is from the in-use phase, the industry has strived to minimise the energy used to make its products, not least because this also helps reduce costs and improve competitiveness. Typically output influences energy use, but the industry has a strong track record in reducing energy and CO2 use in both relative and absolute terms.

Manufacturing performanceEnvironmental performance 1

Department for Energy and Climate Change (DECC) figures show vehicle manufacturing accounts for around 4% of energy consumption by all industry in the UK.

Energy usage and waste-to-landfill fell 48.1% and 90.1% respectively over 15 years and 10.4% and 26.3% on 2013.  Follow the links below for more detail.

 

 

Environmental performance 2

Vehicle performance

The automotive sector once again delivered lower CO2 emitting models, which helped average new car CO2 emissions fall to a record low of 124.6g/km in 2014. This was 2.9% lower than in 2013 and 31.2% down on 2000. It was also 4.2% below the 130g/km pan-EU 2015 target.

This is helping to reduce consumers’ fuel bills and tax burden, and has helped total CO2 emissions from all cars in use to fall 17% compared with 2000, despite a 4.3% increase in distance travelled.

 

 

 

 

 

End of life vehicles

When a vehicle reaches the end of its life it must be disposed of in an environmentally responsible way through an Authorised Treatment Facility (ATF).

From 2015 the industry must ensure that 95% (up from 85% previously) of the vehicle by weight is re-used, recycled or recovered. The sector has been achieving the previous target but the new tougher limits have required considerable investment from both the VMs and the recycling industry in new processes.

SMMT, on behalf of the industry, made an agreement with Autogreen to provide ELV producer responsibility for orphan vehicles – those brands that are no longer commercially active. This means the entire car and LCV parc is covered by the ELV Directive and consumers can easily dispose of their vehicles in a no-cost, safe and environmentally friendly manner.

Click through to download the full 2015 Sustainability Report

A strong, sustainable and diverse supply chain is important for the well-being of the automotive sector in the UK.

The majority of companies and manufacturing employees are found in the supply chain, notably the manufacture of components, sub-assembly and full assembly for the vehicle manufacturers. Suppliers also provide product development, inbound and outbound logistics and other support services.

This graphic shows the size and scope of the UK supply chain:

Supply chain 1

 

Supply chain key performance indicators

SMMT welcomes four new supply chain companies as signatories to the report – CabAuto, DHL and UYT. Signatories’ activities now include electronics and aftermarket products, automotive system solutions (engine, transmission, chassis and e-mobility systems) and supply chain management (logistics, freight forwarding, transportation and distribution management).

There are now 10 supply chain signatories – which represent 40% of all signatories to this report. While this remains a small sample out of the 2,000 or so supply chain companies identified in the sector, it does help to give a picture of this element of the sector.

All of the supply chain KPIs were positive in 2015.

Supply chain 2

The re-shoring challenge

Increased investment and output from vehicle manufacturers in the UK should help grow the supply chain. Previous analysis showed that the UK supply chain is capable of providing 80% of vehicle components and the Automotive Council estimated a £4 billion sourcing opportunity for the sector.

The Automotive Council’s report Growing the Automotive Supply Chain: The Opportunity Ahead showed that sales from UK suppliers to UK vehicle makers grew by 19% through 2014.

 

Remanufacturing

Remanufacturing of automotive parts can deliver environmental and economic benefits for the UK automotive sector at the beginning, middle and end of a vehicle’s life. The total remanufacturing sector is already estimated to be contributing £2.4 billion to the UK economy. However, it has the potential to deliver significantly more and an all-party parliamentary group of MPs concluded that remanufacturing has a compelling environmental, social and economic case.

Click through to download the full 2015 Sustainability Report.

 

People

EmployeesPeople 1

In line with increased growth and recovery in the sector, the number of jobs dependent on the automotive sector in the UK has continued to increase, rising 3.5% to 799,000 in 2014, with direct employment in automotive manufacturing jobs up 0.6% to 158,000.

The automotive sector is up-skilling its existing workforce as a strategic priority, and the amount of training provided by signatories was up 35.2% in 2014, from 2.5 days per employee to 3.3.

Safety of the workforce is a key priority for the sector, and so the total number of lost-time incidents fell by 27.4% in 2014 and was down 71.8% compared with 2002 to an all-time low. This reflects on-going and now embedded safety procedures being maintained and enhanced over the years. The number of incidents per 1,000 employees fell 28.8% to a new low of 2.2 in 2014, and was 83.9% down on the 13.4 level reported in 2002.

 

Promoting automotive careers to young peoplePeople 2

Employers within the UK automotive industry are taking ownership for addressing the skills needs of the sector through the development of the Automotive Industrial Partnership (AIP), a £30 million joint initiative between government and industry.

The UK automotive sector continued to lead the way in supporting government’s See Inside Manufacturing initiative in 2014. Automotive organisations from across the UK, large and small, hosted activities in October designed to change young people’s perceptions of manufacturing and the automotive industry.

Supported by SMMT’s Charitable Trust and with partnership from BMW, Ford, Toyota and Unipart, the Foyer Federation project aims to develop the skills of young people who have experienced challenges in their lives to enable them to be employable and, ultimately, independent adults. In 2014, 41 young people participated in the project, which featured experience in automotive manufacturing plants, and 46% of them subsequently moved into employment.

Michelin’s training centre in Dundee has trained more than 300 of its own apprentices since being established in the early 1970s. Following the collapse of local training providers in the mid-1990s and a shift in emphasis by local colleges away from practical engineering training, Michelin stepped in and offered training for apprentices from other companies, notably SMEs. To date Michelin has worked with more than 45 companies and trained more than 175 such apprentices.

 

Click through to download the full 2015 Sustainability Report.

 

Vehicle emissions

The Office for Low Emission Vehicles (OLEV) has ambitions for almost every new car and van to be zero emitting at the tailpipe by 2040, in order that the fleet renewal delivers a zero emission parc by 2050.

Government and industry share the view that positioning the UK at the forefront of ultra-low emitting vehicle development, manufacture and use will be of significant benefit to both the environment and the UK economy. The EU’s New Car and Van CO2 Regulations set out the fleet average CO2 emissions required of manufacturers at 95g/km for cars and 147g/km for vans by 2020, with discussions about targets beyond 2020 are already beginning.

Government is also supporting emerging technologies, through OLEV and Innovate UK. The Advanced Propulsion Centre (APC), which opened in November 2014 as part of the automotive industrial strategy, will channel £1 billion of investment from government and industry over the next 10 years to help support the UK in designing and delivering these lower emission technologies.

Connectivity

Connected and autonomous vehicles could prove transformational for the automotive sector, as well as society – providing huge social, environmental, industrial and economic benefits, and boosting the competitiveness of the automotive sector and wider UK economy. Connected vehicles use technology to connect to devices within the vehicle itself, as well as external networks, whilst autononomous vehicles are capable of functioning without a human operator.

Some of these technologies, such as emergency braking, lane assist, congestion avoidance and wi-fi connectivity, have already become commonplace. However, while vehicles that are capable of driving without human input are now being tested, it will take a number of years before they are available on the market. These technologies can help cut accidents, but can also enable the existing road infrastructure to be more effectively used (for example, by vehicles travelling more closely together), reducing congestion and delivering improved traffic flow. This has the benefit of reducing emissions, as well as allowing the occupants to do more productive things while on the move.

An SMMT-commissioned report by KPMG in March 2015 demonstrated that the overall economic and social benefits of such vehicles, as shown in the infographic below.

Future 1

 

Click through to download the full 2015 Sustainability Report.