Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders (SMMT), is to give evidence to a House of Commons Business and Enterprise Committee review of automotive support packages, including the Automotive Assistance Programme, today (20 May 2009).
The UK motor industry continues to face extremely challenging economic conditions and has needed all its strength and resilience to weather the impact of the global recession. Industry’s focus has been on sustaining its industrial capability and ensuring it is best placed to benefit from growth when it returns.
“Government support schemes, particularly the Automotive Assistance Programme and the scrappage incentive scheme are positive responses to direct requests from industry,” said Everitt. “Important lessons about the flexibility and accessibility of the Automotive Assistance Programme are being learnt by industry and government. However, industry remains concerned that a reluctance by banks to provide direct support to industry is limiting the effectiveness of the programme and its benefit to companies in the supply chain.”
The UK motor industry has the opportunity to retain and grow its share of the global automotive market by maintaining investment in new technology and innovative products. SMMT fully supports the recommendations of the New Automotive Innovation and Growth Team and believes the UK motor industry has a vital role to play in helping to rebalance the economy.
The inquiry will run for three days and will seek evidence from Richard Parry-Jones CBE, chair of the New Automotive Innovation and Growth Team, GM, Jaguar Land Rover, Leyland, Multipart, the North West Regional Development Agency and Toyota,
To date, no guaranteed loan has been approved but the early experiences of industry to the programme have highlighted the following concerns:
- Companies initially found it difficult to gain access to relevant information and to meet all the eligibility criteria.
- For smaller companies within the industry the process remains confusing and unclear.
- The gap in guarantees between the £1 million offered by the Enterprise Finance Guarantee Scheme and the AAP at £5million means that some companies in the sector are unable to take advantage of either scheme.
- There is still unwillingness by banks to invest in the automotive sector.
At £20 bn, the automotive sector is Europe’s largest investor in R&D, driving industry forward and helping deliver more sustainable motoring for the 21st century. Technological innovation has helped car and CV manufacturers slash CO2 and air quality emissions from vehicles. New diesel cars for example emit 95% less soot from the tailpipe than those made 15 years ago and average new car CO2 has been cut by 19% since 1997.
The energy needed to produce each vehicle is down 12%, water use is down 9% and waste to landfill is down 25%, compared to 2006 performance. CO2 emissions per vehicle produced have fallen 14% in the last year and by 45% since 1999. Almost 10,000 tonnes of waste have been prevented from entering landfill sites. For more details, download SMMT’s ninth annual Sustainability Report from the SMMT website .
Why is the automotive sector important to the UK economy?
- 27 car and CV manufacturers operating in the UK
- 1.75m cars and commercial vehicles produced each year
- £51b turnover
- £9.5 billion value added
- Over 800,000 UK jobs
- UK automotive manufacturing supplies over 100 markets worldwide, offering some resilience to UK issues
- New cars emit less CO2 than older models – average new car CO2 emissions have fallen 19% in the last decade
For more information on the UK motor industry, visit www.smmt.co.uk or www.motorindustryfacts.com.
