SMMT at Trade and Industry Select Committee today (9 March)

09 March 2004 #SMMT News

SMMT representatives will today give evidence to the Trade and Industry Select Committee inquiry into the UK Automotive Industry in 2004.


Chief executive Christopher Macgowan will highlight the strengths of an industry which generates annual turnover of £45 billion that supports 850,000 jobs. He will also promote the benefits of greater industry-government partnership to realise the sector’s long-term potential on the global stage.


Mr Macgowan commented, ‘It is important that we don’t lose sight of two facts when focusing on the health of the motor industry. Firstly, the sector operates at an international level and we are a key global player. The UK boasts many of the most productive car and truck plants and a strong component manufacturing base. Secondly, there is a clear vision for the future: it is a prosperous future built on the foundations of skills, competitiveness and productivity. This will be realised, in part, through a stronger working relationship with government.’


He added, ‘Our message is a positive one and we welcome the opportunity to present evidence to the Committee. But the partnership we have with government is one which needs to develop further. There is no room for complacency. Regulation, taxation and skills in the UK must allow companies to be competitive globally.’


Some of the most important factors affecting the sector include:


Competitiveness and Productivity


Exports have been helped recently by a 15 per cent drop in sterling’s value. However, currency fluctuations continue to create uncertainty and, while the government dithers over any timetable for UK entry to the Euro, long-term investment decisions remain under threat.


Since 1996 SMMT Industry Forum has helped more than 450 vehicle and component manufacturers to improve performance. Shop-floor based, their training programmes encourage process improvement and waste reduction, cutting costs and improving bottom line performance.


The skills shortage


The motor industry suffers a skills shortage with many vacancies for qualified engineering and technician grade roles. Greater incentives for those pursuing science and engineering in higher education should be available and SMMT welcomes the recent launch of Employer Training Pilots.


The Automotive Academy offers a joined-up approach to bridging the skills gap. With £15 million of government backing, the Academy has been tasked with developing a national approach to skills training from shop floor through to boardroom focussing on technical, leadership, management and support programmes. Approved courses, providers and assessors will be kite-marked.




The industry has welcomed the introduction of tax breaks to support R&D investment in the UK. However, more assistance needs to be given to all SMEs in the automotive supply chain to protect up to 140,000 jobs and prevent further loss of these enterprises.


Regional Development Agencies (RDAs) are to be applauded for their efforts in attracting investment from overseas but more central co-ordination is needed. At present different UK regions can be involved in direct competition when the focus should be a national investment strategy.


The industry believes that government should also be more active in promoting the benefits of investing in UK plc at home and overseas. This summer’s Sunday Times Motor Show Live, provides an ideal platform to demonstrate this commitment to all stakeholders.




The industry must be given the opportunity to assess the impact of all new EU regulation at the earliest stage. The establishment of the Better Regulation Taskforce and government’s recently published Revised Regulatory Reform Action Plan are signs that the government is committed to what is a basic principle underpinning a positive business environment.


The government should also avoid the temptation to ‘gold-plate’ when transposing EU Directives into UK law. A light touch with an approach that levels the playing field across Europe should always be the goal. This means no more onerous regulation – and costs – applied to UK manufacturers than those operating in mainland Europe.


Industry best practice


To demonstrate its commitment to customers SMMT members have created a New Car Code of Practice. In the form of a set of promises made by manufacturers to consumers, the new Code addresses OFT concerns about warranty terms and conditions. SMMT eagerly awaits the stamp of OFT approval.


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