Mass of regulation clouds future for industry

22 November 2005 #SMMT News

The UK motor industry is positive about future prospects, but the cost burden of new legislation continues to blight competitiveness. That’s the central theme to emerge from Automotive Manufacturing 2005 – the industry perspective, SMMT’s third annual survey of senior industry executives, published today.

While productivity is improving and initiatives to address the skills gap are starting to bear fruit, the industry has called for action to limit the legislative cost burden. Furthermore, the sector remains critical about transport infrastructure and has called for more support from government for international trade.

SMMT President Roger Putnam commented, ‘Our survey shows the strength of feeling about the cost burden of new and sometimes conflicting legislation. This central concern is one reflected across Europe but my hope is that it may subside in years to come. The CARS21 initiative has an agenda to work towards better regulation, a coherent 10-year roadmap for the industry and an integrated approach to both the environment and safety agendas. Its work will be critical to the future of the automotive sector in the UK.’

Key report findings reveal that:

  • Growth is expected by most companies in the next five years. 84% of those surveyed say that prospects are good compared to 81% last year and 75% in 2003.
  • 95% of those surveyed say that the burden of legislation has significantly increased costs in the last five years; 93% believe the situation will worsen in the next five.
  • Respondents are pessimistic about improvements in the UK business environment. While 53% feel it will improve over five years compared to mainland Europe, this figure falls to 30% when compared with the US and just 4% in relation to companies operating in the Asia-Pacific region.
  • The UK transport infrastructure makes it difficult for UK companies to remain competitive according to 78% of those surveyed, with 87% believing it will not improve in the next five years.
  • Just 9% of respondents feel that government support for international business development has improved over the last year.
  • On skills, 48% of those surveyed say that it is hard to recruit appropriately skilled employees. However, this is an improvement from 65% last year.
  • Level three skills remain the greatest headache for employers. Nevertheless, in three years, the proportion of respondents citing it as the most difficult area to recruit has fallen from 46 to 29%.
  • Two-thirds of companies are aware of the work of the Automotive Academy, compared to just one third last year, with 89% saying it is key to addressing the skills gap in automotive manufacturing.

Automotive Manufacturing 2005 – the Industry Perspective was published at SMMT’s Annual Dinner on 22 November 2005. Copies are available to download by using the link below.

The report reflects the views of executives from 80 companies, employing more than 100,000 people in the UK automotive sector from component and aftermarket suppliers to car and commercial vehicle manufacturers.


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