Register for future APC news

Back to list

Billion pound commitment to power UK auto sector to the future

  • The government and automotive industry are investing £500 million each over the next ten years in an Advanced Propulsion Centre
  • Automotive Council members aiming to recruit more than 7,600 apprentices and 1,700 graduates over the next five years
  • The Automotive Investment Organisation is aiming to double the number of jobs created or secured in the automotive supply chain through Foreign Direct Investment over the next three years to 15,000
  • Technology Strategy Board launches new £10 million competition for research and development low carbon vehicle projects

The government and automotive industry are investing £500 million each over the next ten years in an Advanced Propulsion Centre (APC) to research, develop and commercialise the technologies for the vehicles of the future.

Backed by 27 companies in the sector, including supply chain companies, the commitment is expected to secure at least 30,000 jobs currently linked to producing engines and create many more in the supply chain.

The announcement was made today at the Goodwood Festival of Speed by the Business Secretary Vince Cable and Professor Richard Parry-Jones who both co-chair the Automotive Council.

It forms part of Driving success – an industrial strategy for growth and sustainability in the UK automotive sector published jointly by the government and industry. It follows the recent plans for construction, aerospace and other key sectors to secure sustainable future growth in the economy.

With £6 billion of investment in the UK over the last two years, 1.58 million vehicles produced in 2012, and four out of five vehicles exported to 100 countries worldwide, the automotive sector has transformed itself into a real UK success story.

This strategy sets out how the UK can secure the long term future of the industry over the next 20 to 30 years by growing the UK share of the value chain and by getting ahead of the game in research and development (R&D) on low carbon vehicles.

The report looks at four key themes:

  • technology: how our vehicles are powered in future; from 2040 they will no longer have the traditional petrol or diesel engines as we know them
  • supply chain: how government and industry can work together to grow the UK supply chain and win more overseas business
  • skills: how the right skills are in place to build on the success of the sector
  • business environment: how to maintain the UK’s competitiveness in the global auto industry

Business Secretary Vince Cable said:

The UK automotive sector has been incredibly successful in recent times, with billions of pounds of investment and new jobs. This has been achieved by government and industry working together.

With the next generation of vehicles set to be powered by radically different technologies we need to maintain this momentum and act now. Our industrial strategy will ensure we keep on working together to make our automotive industry a world leader.

Professor Richard Parry-Jones said:

Businesses prefer consistency, stability and a clear path to the future in order to make investment plans. Driving Success, the automotive industrial strategy, sets out how industry will work together with the government over the next 20 or 30 years. This is critical to sustaining and growing a thriving UK automotive sector in a highly competitive global industry.

Last month Vince Cable announced the setting up of the Automotive Investment Organisation, headed up by Joe Greenwell, the former chairman of Ford of Britain, to lead on attracting inward investment in the UK. Over the past three years we have seen just over 7,500 jobs created or safeguarded in the automotive supply chain through foreign direct investment. It was announced today that the Automotive Investment Organisation is aiming to double this figure to more than 15,000 jobs created or secured over the next three years.

The strategy also outlines some of the challenges the sector faces including the need for a skilled workforce. Industry members of the Automotive Council and its working groups expect to recruit more than 7,600 apprentices and 1,700 graduates over the next five years.

The Technology Strategy Board launched a £10 million competition today that could see successful projects fast tracked for commercialisation through the Advanced Propulsion Centre. Businesses are being invited to bid for support on innovative collaborative low carbon vehicle projects.

Notes to editors:

1.Driving success – an industrial strategy for growth and sustainability in the UK automotive sector is available here https://www.gov.uk/government/publications/driving-success-uk-automotive-strategy-for-growth-and-sustainability.

2.Responses to the automotive industrial strategy:

3.Irene Graham from the British Bankers Association (BBA) said:

The banking industry welcomes this focussed automotive industrial strategy. As part of it, the BBA has established an automotive forum to enable the two sectors to work together in creating solutions and activities that support this critical growth industry to the UK and its supply chain. We are pleased that through that forum a tooling finance framework has been agreed which can allow the respective commercial entities to take forward product ideas and solutions. The BBA looks forward to continuing the constructive engagement with the Automotive Council and supporting the Government’s industrial strategy announced today.

4.Lord Drayson, Chief Executive Officer of Drayson Racing Technologies said:

It is great to see that the government recognises that the UK has a world-leading motorsport sector that invests significantly in R&D to optimise performance and efficiency.

The support announced today to accelerate the development of green propulsion technologies – such as electric powertrains is very welcome. Innovations such as the high performance electric and hybrid powertrains that we see on the racing cars of today will filter down to the road cars we will all be driving tomorrow.

5.Nigel Stein, Chief Executive, GKN plc said:

GKN has fully played its part in the creation of the Automotive Industrial Strategy but more importantly will continue to support the initiative through the delivery phase ensuring that the UK remains at the forefront of the global automotive industry.

6.Dick Elsy, Chief Executive Officer of High Value Manufacturing Catapult (HVMC) said:

HVMC is pleased to have been involved in the development of the APC (Advanced Propulsion Centre) concept and plan. HVMC is central to the manufacturing development process for the new technologies through the capabilities we have within our centres. I see this as an excellent initiative to develop the automotive supply chain in the UK. It is also an example of collaboration across the industry – a model which the HVMC supports through its centres.

7.John Martin, Nissan’s Senior Vice President for Manufacturing, Purchasing and Supply Chain Management in Europe, said:

Nissan was involved with the UK government in developing the UK Automotive Industrial Strategy which is being published today. As the largest car manufacturer in the history of the UK motor industry we are fully committed to supporting its implementation.

The leadership and support from the government at all levels in developing the strategy has been fantastic and has really helped to understand and prioritise the long term issues that the nation and the industry have to tackle to maintain the UK’s leadership in vehicle and engine manufacturing.

8.Richard Hill, Head of Automotive Sector at RBS and member of the Automotive Council, said:

The automotive strategy highlights the lead that RBS has taken to support the auto sector and address the funding challenges within the supply chain.

To support the growth of this vital sector RBS has invested in building a dedicated auto team with excellent understanding of the industry and which is developing bespoke funding facilities to meet the needs of each car manufacturer’s supply chain structure.

As a key representative on the UK Automotive Council, we have played a pivotal role in establishing a joint banking and automotive industry forum through the British Bankers’ Association.

9.Mike Baunton, SMMT Interim Chief Executive said:

The motor industry is a major contributor to the UK economy and has been increasing that contribution in a challenging economic environment. In partnership with government, we have now developed a roadmap to secure further long-term growth that is detailed in the strategy document launched today. Our goals are to grow vehicle production and component supply with more investment, jobs and advanced technology developed in the UK.

The Automotive Council is an exemplar of industry and government working together to build long-term success and it is through the Council that we will implement the roadmap. I am confident that the strategy and the joint investment by government and the industry will make the UK an even more attractive place to design, build and sell automotive components and vehicles.

10.Welcoming the Strategy, Iain Gray, the Chief Executive of the Technology Strategy Board, the UK’s innovation agency, said:

This automotive strategy is the result of a great deal of effort over a number of years from all parties in the automotive sector and the government. We have an agreed way forward which will give stability and momentum to the transport industry in this country. It will give businesses – large and small – the confidence to plan for the future in the UK.

11.The 27 companies backing the Advanced Propulsion Centre are: Bentley, BMW Group, Bosch, BP, Castrol InnoVentures, Caterpillar, Ford, GKN plc, High Value Manufacturing Catapult, Intelligent Energy, JCB, JLR, Lotus, MAHLE Powertrain, McLaren, Millbrook Proving Ground, MIRA, Morgan, Nissan, Optare, Productiv, RDM Ltd, Ricardo, SMMT, Tata Motors, Transport Systems Catapult Ltd, and West Midlands Manufacturing Consortium Ltd.

12.On 12 June 2013, Vince Cable announced the Automotive Investment Organisation (AIO) which will be led by Joe Greenwell, the former Chairman of Ford. Funded with up to £3 million over the next two years, the AIO will spearhead the campaign to attract inward investment to the UK. Led by UK Trade & Investment, it will take strategic direction from the Automotive Council, to develop a strategy to increase the supply chain and build on the opportunities identified in the UK. A report published by the Council in 2012 found that there was an additional £3 billion of new business that could be won by suppliers.

13.The automotive sector is one of 11 key areas that the government is working collaboratively with industry on a long term plan to deliver economic growth and prosperity. More information on the Industrial Strategy can be found at: https://www.gov.uk/government/policies/using-industrial-strategy-to-help-the-uk-economy-and-business-compete-and-grow

14.The joint industry/government Automotive Council was set up in 2009 as part of the government’s response to recommendations made in the industry-led report from the New Automotive Innovation and Growth Team (NAIGT). It is co-chaired by the Business Secretary Vince Cable and Professor Richard Parry-Jones. Its main aims are to enhance the attractiveness of the UK as a location for global automotive investment, promote UK-based manufacturers and technologies, strengthen the supply chain and position the UK as a leading global player in developing, manufacturing and using ultra-low carbon technologies. More information on the Automotive Council can be found at: http://www.automotivecouncil.co.uk/.

15.The Automotive Council report Growing the UK automotive supply chain – the road forward 2012 update can be found at: https://www.gov.uk/government/publications/growing-the-automotive-supply-chain-the-road-forward-2012-update.

16.The government’s economic policy objective is to achieve ‘strong, sustainable and balanced growth that is more evenly shared across the country and between industries.’ It set four ambitions in the ‘Plan for Growth’, published at Budget 2011:

  • to create the most competitive tax system in the G20
  • to make the UK the best place in Europe to start, finance and grow a business
  • to encourage investment and exports as a route to a more balanced economy
  • to create a more educated workforce that is the most flexible in Europe

Work is underway across government to achieve these ambitions, including progress on more than 250 measures as part of the Growth Review. Developing an Industrial Strategy gives new impetus to this work by providing businesses, investors and the public with more clarity about the long-term direction in which the government wants the economy to travel.