Presentation on theme: "The UK Automotive Scene"— Presentation transcript:
1The UK Automotive Scene David Croxson – SMMT Head of International
2An introduction to SMMT The Society of Motor Manufacturers and Traders (SMMT)is the principal UK motor industry trade associationSince representing the UK industry - vehicle manufacturers, OEM component and independent aftermarket manufacturers, suppliers and distributors .Liaising with UK government – Automotive Council.Contact with EU Commission and trade bodies to influence national and international standards and legislation – and help members access UK and European government funding.Promoting industry - inward / outward trade delegations / exhibitor groups overseas, organising UK Commercial Vehicle Show and Meet the Buyer B2B events.Support on technical and vehicle legislation, e-business, quality, environment, education and training.Providing data services - acknowledged as reliable, accurate and comprehensive.
3Introduction to the UK automotive sector Rising to the economic challenge – production and registrationA place in the global market – foreign investment and exportsClimate change and emissionsGovernment and industry working together – a low-carbon futureResearch & Development in the UKUK Supply ChainElectric, Ultra-Low Carbon and Alternatively Fuelled VehiclesA European perspective
4UK Automotive rising to the challenge April year to date manufacturing volumes for cars and engines strong, CVs weaker.Major strides in reducing environmental impact in products and manufacturing processes.New car sales totalled 1.94mn. units in 2011, down 4.4% on 2010, but ahead of the 1.92mn. forecast.In 2011 better than expected trend in commercial vehicle registration: truck registrations up 42,944 units (24.6%), vans to 3.5t registrations up 16.7% to 260,153. Bus & Coach down 12.8%.2011 UK production remained encouraging – strong export growthSignificant increase in UK investment by VMs in R&D and local sourcing of components.Car production up 5.8%, engine production up 4.9% on 2010 but commercial vehicle production down 2.3%.
5A place in the global market Large majority of UK vehicle assembly capacity owned by non- British companies.Focus on quality, flexibility and emerging technologies and markets.New growth technologies – electric vehicles, low-carbon energy efficient engines, new powertrains, instrumentation and controls.Significant focus on increasing purchasing sourced from UK.Unique global talent and resource in, automotive academia, independent design engineering, motorsport and formula motor racing - closely linked to mainsteam automotive manufacturing.UK remains 4th largest vehicle manufacturer in Europe.High proportion of automotive production continues to be exported.Vehicle and engine production increasing in both 2010 and 2011Exports continue to increase – 83.7% car, 57.7% commercial vehicle and 70.2% engine production exported.
6Climate Change and Emissions Post Durban 2011 – increased European focus on climate change and air quality inevitable.Strong UK government focus on e-mobility but government is technology neutral.Transition to ultra low carbon vehicles is high priority.SMMT’s publication of CO2 Report tracks further reductions in CO2 and emission – with further improvements anticipated.Several UK cities installing charging points and SMMT EV Group supporting emerging technical and standards agenda in Europe.Introduction of Euro 6 emission standard for heavy commercial vehicles significant challenge for industry.Emissions in 2011 fell by 4.2% to 138.1g/km average – down 23% since 2000.Diesel and AFVs take 50.6% and 1.3% of market respectively in EV registrations 1,098 units.
7Government and Industry Working Together Automotive Council set up in December 2009.Effective collaboration to identify challenges and stimulate growth.Sub groups for Supply Chain and Technology focusPublication of: Commodities Roadmap and Technology RoadmapMeet the Buyer events develop local UK sourcing opportunities.Technology Strategy Board (TSB) and Office for Low Emission Vehicles (OLEV) coordinating R&D funding spend to best advantage.Low Carbon Vehicle Innovation and Public procurement Programmes launchedEngineering and Physical Sciences Research Council (EPSRC) coordinating academic research and linkage with industry.SEMTA and Skills Academy - responding to increased demand for engineering skills through apprenticeships, graduate programmes and staff training courses.
8Research & Development in the UK UK government introducing beneficial tax changes and incentives to support manufacturing R&D.Development of wide range of low carbon vehicle, associated technologies and infrastructure.R&D in UK automotive is over £1.5bn per annum increasing 9% year on year.World class universities linked to industry creating inward investment opportunities.Low CO2 engine technology has led to significant new VM investment.UK is aiming to be global centre of excellence for low carbon and high value technologies.EV investment, research, development and production in UK at an increasing level
9UK supply chainAround 2,350 UK companies regard themselves as ‘automotive’ suppliers, employing around 82,000 people – SMMT Automotive Industry Finder databaseAbout 80% of all component types required for vehicle assembly operations can be procured from UK suppliers but two thirds in value of OEM requirement is imported.The UK automotive supply chain estimated to be £7.4bn per annum, typically generates further £4.5 - £5bn of added value annually.Automotive Council Supply Chain Group survey and report published – sourcing roadmap.
10Electric, Ultra Low Carbon and Alternatively Fuelled Vehicles UK Government policy suite to encourage early market adoption.£300 million Plug In Car and Plug In Van grants.Recent move towards hydrogen with UKH2Mobility initiative.Third round of Green Bus Fund announced – 526 hybrid-electric and 16 all electric buses purchased under scheme.£8 million Green Truck Fund for low emission HGVs.Government initiative to encourage 8000 charging points by 2013 – installed as at October 2011
11A European perspective Close involvement with ACEA, CLEPA and FIGIEFA to influence European Commission agenda.Development and harmonisation of technical standards and regulations continues apace with e-mobility, safety and security.Close liaison with UK Department of Transport to influence UNECE WP29.Whole Vehicle Type Approval, Harmonised Light Vehicle Testing, EU Noise Limits are challenging for industry.Europe still has significant economic growth, sovereign debt and overcapacity issues to resolve.
12Why Inward Investors Choose the UK Proven industry capability.In EU / outside Euro / Internationally aware / globally connected / politically stableEnglish speaking, flexible and skilled labour force.Extensive, sophisticated & established vehicle and components manufacturing cluster.World-leading hub of innovation and R&D.Strength and direction of the Automotive Council and Government support for automotive R&D and manufacturing.World leader in the development, demonstration, manufacture and use of ultra- low carbon automotive technology.BMW MiniJaguar C-X75 Prototype now to go into productionThe UK is leading the change for new transport low carbon technologies and reducing production and usage emissions.
14Key elements of the sector Strong independent design engineering and testing base.Significant foreign manufacturing investment and R&D investment / spend.Efficient manufacture and high export ratios of both volume and premium / niche vehicles.Strong powertrain sector with technological innovation and scale.Low carbon technology and electric vehicle development and manufacture, with strong government support.Comprehensive OEM aftermarket component manufacture, distribution, service and repair capacity.In depth HE academic study & research and FE sector training.Highly sophisticated retail and distribution logistics import / export services.
15Key issues for the UK automotive industry Economic crisis in Europe, alongside market decline / overcapacity in some markets.Sustainable Government support? Problems with suppliers’ access to finance.Low cost economy countries / High growth markets – both opportunity and competitive threats.Local supply chain fragmented - erosion “hollowing out”/ overseas head office decision making.Some SMEs lack global trade awareness / global competitiveness / skills and training.Maintaining manufacturing efficiency, investment in UK based design engineering, research and development.Environmental / Low carbon legislation, Alternative fuels, ICE hybrids, Electric vehicles.
16Key UK technology opportunities Build and retain capacity in “sticky” technologies , ie:Energy storage and managementElectric motors and power electronicsLightweight technologiesCO2 and emissions reduction technologyOther key technologies in which UK has potential:In-vehicle communications and management systems, driver communications; congestion warning systems; navigation; telematics.Materials; composites and alternative materials / jointing technologyEnvironmental protection / emissionsRapid prototyping and manufacturing process improvement.
17UK Market Overview - 131 key vehicle manufacturing sites: seven volume passenger car, 11 commercial vehicle, bus, coach and taxi manufacturers.Global base for engine manufacture - over 2.5m. in 2011.19 of the world’s top 20 industry suppliers and 7 global volume vehicle manufacturers located in UK.Motor sport cluster for development and manufacture: eight F1 teams supported by >300 specialist motorsport companies.Many foreign vehicle manufacturers now have UK-based R&D centres: Nissan at Cranfield; Ford at Dunton; SAIC at Longbridge; Changan at Nottingham; TATA at Warwick. – and Jaguar-Land RoverCreation of UK Automotive Council – framework for collaboration with Government to improve the UK investment offer and positioning of UK as centre for ultra low carbon development.
18UK Market Overview - 2Majority of UK automotive manufacturing foreign-owned.Mature market, 4th largest car producer in EU*.Exports average >£25 billion annually, over 10% of UK exports.2011 car production 1.34mn, up from 1.27m in 2010, a 5.5% increase; exports increased from 75% in 2010 to 83.7% in 2011.Commercial vehicle production consistently > 200,000 between , but reduced to 90,000 in (not supported by scrappage scheme) production back to c123,000, with exports c70% but 2011 saw further 2.3% reduction to 120,000 units with exports reducing to 69,000 units being 57.7% of production.UK had fourth highest R&D spend in Europe at over £1.5 billion p.a.* Source OICA
19UK Market Overview - 3SMMT 12th Annual Sustainability Report published 2011, with 18 signatory companies - across the broader industry, showed year on year:Manufacturing turnover up 20% to £49bn.Output up 27.8%, returning to pre-recession volumes.Number of vehicles exported up 31%, totalling £29bn in value.Energy use per vehicle produced down 8%.Manufacturing CO2 emissions down 10.5% per vehicle produced.Manufacturing waste to landfill produced per vehicle down 8%.New automotive apprenticeships up 9% adding to the 737,000 jobs dependent on the sector.
20Automotive Council – www.automotivecouncil.co.uk A very powerful industry and government partnershipHas helped to transform automotive business environment to provide a more compelling investment proposition for related industries:Expanding technology roadmaps for low carbon vehicles and fuels, to help promote the UK as a strong candidate to develop these and other technologies;Developing commodities roadmap helping to develop a stronger and more competitive automotive supply chain;Providing a very strong public voice for the industry to support the value of the industry to the UK and to global partners;Ensuring high level, strategic, continuous conversation between government and the automotive industry in the UK.
21Vehicle Production in Millions UK ProductionRestructuring, Rebirth, Recession, RecoveryVehicle Production in MillionsYears
22Long-term commitment to UK – major announcements in 2010-11 BMW: £500m investment across all 3 UK facilities for the 3rd generation MINI; expansion of range to include Coupe and Roadster MinisFord: 5 year £1.5bn investment in engineering and manufacturing facilities.GM: next generation Vivaro confirmed for Vauxhall’s Luton plant from 2013/4.Honda: commitment to new Civic and CRV, following total £1.4bn investment at Swindon.Nissan: £420m investment to make LEAF and batteries; £192m investment for new QashqaiTata JLR: retaining three vehicle assembly sites, build new engine factory, widen product range, creating >2,000 new jobs; >£2bn of supply contracts for the Range Rover Evoque; £490mn investment for C-X75 hybrid supercarTata: establishment and expansion of European Technical Centre.Aston Martin: Cygnet production to create 150 new jobs; Rapide production moving to Gaydon from Austria.McLaren: MP4-12C to be produced in Woking.SAIC MG: MG6 GT to be designed engineered and assembled in Longbridge.Optare: new 1,200 capacity bus manufacturing facility in Yorkshire..
23UK Vehicle Production in Thousands Changing Dynamics of UK Car SectorDemise of the old UK ‘Big 3’ - Growth of Japanese & BMWUK Vehicle Production in Thousands
24UK vehicle manufacturers’ product ranges VOLUME CARSPRESTIGE / NICHE LOW VOLUME CARSBMW - Mini range, incl. Clubman, Coupe and RoadsterAston Martin - DB9, Vantage, Virage, CygnetHonda - Civic, CR-V & JazzBentley – Continental, MulsanneJaguar – XJ, XK XFCaterham - Classic, Super 7Land Rover - Defender, Discovery, Freelander, Range Rover, Range Rover Sport & EvoqueGinetta - F400, G50EV & G50R road cars & G20, G40, G40 Junior, G50 & Zytek race carsNissan – Note, Qashqai & Juke (and Leaf electric from 2013)Lotus - Elise, Evora, Exige ; new Elan, Elise & EspritMcLaren Automotive MP4-12C sports car (from 2011)Toyota - Auris, Auris Hybrid & AvensisVauxhall – AstraMorgan – Supersports, 4/4 Sport, 4 seater, Plus4, Roadster & Roadster Sport sports carsRolls Royce - Phantom & GhostSAIC - MG6 saloonCOMMERCIALFORMULA 1Alexander Dennis - buses & coachesMcLaren racingDennis Eagle - refuse trucksMercedes F1 - formerly BrawnFord - Transit van, Transit MinibusRed BullVauxhall – Vivaro van and minibus, plus Renault Trafic versionsWilliams F1Renault F1Leyland Trucks - trucksForce IndiaLondon Taxis Int - TX4 taxi and hydrogen fuel cell demonstratorLotus F1Virgin RacingOptare - single & double deck busesWrightbus - buses
26UK Design and Engineering Skills Product planning and development.Vehicle conceptualisation and styling.Rapid prototyping services.Manufacturing engineering/feasibility.Structural analysis & vehicle simulation.Vehicle body, chassis, powertrain & trim.Vehicle component development.Electrical and electronics, chip designing.Engine engineering.Testing and validation, homologation.Special training packages (for CAE, CAM).
27UK Car ProductionCar output in 2011 increased 5.8% to 1,343,810 ( ,270,444)Nissan highest production at – increase of 13.5% on 2010Export market at record high % of production
28UK Commercial Vehicle Production 2011 production reduced by 2.3% at 120,189 vehicles ( ,019)Vauxhall, IBC and Ford = 82.6% of all CV productionExport market percentage reduces to 57.7% of production ( %)
29Vehicle production – rolling year totals at April 2012 Car production rolling year total CV production rolling year total
30% of vehicle production and registrations Production Exports / Registration ImportsThe UK increasingly manufactures cars to export and imports cars to drive83.7% production exported % registrations imported% of vehicle production and registrations
31UK New Car Registrations New car demand totalled 1,94mn. units in 2011, down 4.4% on 2010, but ahead of the 1.92mn. forecast.The Ford Fiesta was the best selling new car in 2011, VW Golf the best selling diesel model. The Supermini segment remains the largest in the UK, with a market share almost unchanged on 2010 at 36.3%. The Executive, Luxury Saloon and Dual Purpose segments all recorded growth in registrations in 2011.Diesel and alternatively fuelled cars both took record market shares over the year.Average new car CO2 emissions fell to a new low of 138.1g/km in 2011, down 4.2% on the 2010 level.The market is forecast to be broadly stable in 2012, with firmer recovery expected in 2013.Diesel and alternatively-fuelled cars took record shares in 2011 with diesel volumes surpassing petrol volumes for the first time.
32New Car Registrations Monthly new car registrations, 2010 and 2011 Annual new car registrations, 2004 to 2013
33Distribution of new car market by mpg 2004 and 2011
34Average new car miles per gallon (mpg) and CO2 g/km, 2004 to 2011
35Diesel share of the UK new car market, 2004 to 2013
36April 2012: AFV and EV registrations data Market SectorMarket Sector LineMonth EndYear To DateMonth End Last YearYear To Date Last YearCAR GRANT SCHEME128488174438CARSDIESEL/ELECTRIC HYBRIDS103299OTHERS189700113335PETROL/ELECTRIC HYBRIDS1,5198,8431,6938,945PLUG-IN HYBRID3PURE EV92430179450RANGE EXTENDER39641,94210,3361,9859,733
37April 2012: AFV and EV registrations data Vehicle CategoryAprilYear-to-date20122011% ChangeTotal pure electric92179-48.6430450-4.4Plug-In Car Grant eligible128174-26.448843811.4Total petrol/electric hybrid1,5191,693-10.38,8438,945-1.1Alternatively fuelled vehicles18911367.3700335109.0
382011 - Buoyant year for van and truck market Truck registrations up 42,944 units (24.6%) for the full year.Vans to 3.5t registrations up 16.7% to 260,153 in 2011. For trucks >6t, registrations for 2011 were 37,410.The very recent trend for growth in two-axle rigids above 6t strengthened markedly. Growth rates ranged from 30 to 90% across the various weight segments for these trucks.Until very recently these sectors had lagged behind what was an artic and multi-axle rigid led recovery.Better than expected trend in registration volumes faces significant challenges just to hold steady over It may be that market specific factors could be more supportive than the meagre rate of economic growth envisaged for this year.
39Van and truck registrations - rolling year trends Dec 2007 to date
40Bus and coach market 20112011 was a challenging year for the bus and coach sector - down 12.8% for the year.Registrations of purpose-built buses and coaches has shown most resilience to challenging market and grew 5.1% in 2011 but:Bus registrations finished the year 13.6% down.Coach volumes dropped 7.1% over the 12-month period.The lighter and converted end of the market struggled to maintain momentum.2012 is set to be a testing year, but government incentives and operator desires to capitalise on fuel efficient technologies should provide much-needed stimulus to the market.”
41Big buses and coaches –rolling year registrations December 2006 to December 2011
42History and levels of Euro standards for cars Entry into force (new type approvals)Emission limitsNew car types All new cars Petrol NOx Diesel NOx Diesel PM Euro 01 Oct '911 Oct '931000 mg/km1600 mg/km(no limit)Euro 11 Jul '9231 Dec '92490 mg/km780 mg/km140 mg/kmEuro 21 Jan '961 Jan '97250 mg/km730 mg/km100 mg/kmEuro 31 Jan '001 Jan '01150 mg/km500 mg/km50 mg/kmEuro 41 Jan '051 Jan '0680 mg/km25 mg/kmEuro 51 Sep '091 Jan '1160 mg/km180 mg/km5 mg/kmEuro 61 Sep '141 Sep '15
43Making significant progress, but challenges ahead UK average new car CO2 – 138.1g/km in 2011.Continuous improvement, pace picked up in last 4 years.Average new car CO2 – (SMMT)
44Influences on CO2 emissions Technological measures to deliver lower CO2–emitting vehiclesImprovements in internal combustion engine (ICE).Development of alternatively fuelled vehicles (AFV).Other influences – aerodynamics, light weighting, efficient tyres etc.Non-test cycle measures, eg gear shift indicators and satellite navigation devices.
452011: A break-through year – breaking 140g/km Diesel cars outsell petrol (diesels 15-20% lower CO2 emitting).Alternatively fuelled cars break 25,000 registrations.‘Mainstream’ electric vehicles on sale.All segments post reductions in average CO2 emissions.Diesel share by segment (SMMT) Registrations of AFVs (SMMT)
46Distribution of the new car market by CO2 Shift into lower CO2 emitting vehicles.46.8% of the market below 130g/km and 3.4% below 100g/km, compared with 0.9% and 0% in 2000.New car market by CO2 bands (SMMT)
47Distribution of the new car market by VED bands ‘E’ band most populated in 2011, was ‘G’ band in 2000.3.4% of the market in ‘A’ band in 2011, was 0.0% in 2000.Just 0.6% of market in top band in 2011, was 4.8% in 2000.New car market by VED bands (SMMT)Note all data split by current 13 band VED system
48Light commercial vehicle (LCV) performance SMMT developing LCV CO2 database.UK average new LCV CO2 – estimated to be 199.2g/km in 2011.LCV face EU CO2 targets – 175g/km in , 147g/km by 2020.Average UK new car and LCV market distribution by CO2 – 2011 (SMMT)
49Making real world improvements Total CO2 from all cars in use down.– 2010 down 10.2% on 2000 and 3.3% on 2009.Faster fleet replacement aids CO2 reductions from all cars in use.CO2 emissions from all cars in use (DECC)
50Challenges aheadEU new car CO2 targets – 130g/km in , 95g/km by 2020.Market acceptance of ultra-low carbon vehicles, especially AFVs.Integrated approach needed to support shift to lower carbon fleet.Average UK new car and car in use CO2 , and pan EU targets to 2020 (SMMT/EU)
51High Level Technology Roadmap - CARS OEMs share a common view (Individual manufacturers will prioritise certain technologies to fit with brand values)