1. Phoenix from the ashes: Can low carbon vehicles ensure the long-term viability of the West Midlands automotive cluster? David Jarvis, Nigel Berkeley & Jason Begley Sustaining Competitiveness: the WM economy in a global context The Belfry, 06th July SURGE Applied Research Centre Sustainable Regeneration

2. 2 Presentation overview The state of play The scale of decline LCVs & the West Midlands region Conclusions

3. 3 The car targeted as an accelerator of climate change and, through congestion a cause of respiratory illness 14% of UK CO 2 emissions in 2009 ‘Low Carbon’ and ‘Alternatively Fuelled’ vehicles in a variety of guises emerging as a partial solution The state of playThe scale of decline LCVs & the West Midlands region Conclusions

4. 4 Stimulated wide ranging academic debate but predominantly from an engineering and scientific perspectives Little focus to date on potential economic opportunities Surprising for two reasons: o Current forecasts of LCV penetration o The relative decline of the UK automotive sector The state of playThe scale of decline LCVs & the West Midlands region Conclusions

5. 5 UK no longer a ‘natural’ environment for car production Contraction in both assembly and supply-chain Still largest exporter of manufactured goods Q1 2012 registered first trade surplus since 1976 The state of playThe scale of decline LCVs & the West Midlands region Conclusions

6. 6 West Midlands auto cluster comprises 1,500 companies and employs 115,000 people Represents 28% of total UK output of automobiles and components But, limited R&D taking place in the UK, overseas ownership of UK brands and demise of volume manufacturing The state of playThe scale of decline LCVs & the West Midlands region Conclusions

7. 7 Strength in design and performance engineering remains High profile OEMs still present (and investing) in the West Midlands Networks of niche vehicle manufacturers provide foundation for transformative shift to low carbon technologies(?) The state of playThe scale of decline LCVs & the West Midlands region Conclusions

8. 8 The state of playThe scale of decline LCVs & the West Midlands region Conclusions Morgan Motor Company Jaguar Land Rover Aston Martin Dennis Eagle JCB MG Motor Westfield Sportscars London Taxis Int. Tata Motors BMW Engines

9. 9 The state of playThe scale of decline LCVs & the West Midlands region Conclusions RegionEmployment in 2010%Location quotient North East11,5009.22.4 North West16,60013.31.2 Yorkshire and The Humber8,8007.00.8 East Midlands9,4007.51.1 West Midlands36,50029.33.4 East9,0007.20.8 London4,7003.70.2 South East10,8008.60.6 South West6,4005.20.6 Wales8,1006.51.5 Scotland2,8002.30.3 Column Total124,600100.0 Automotive employment is defined using the SIC group 29: the manufacture of motor vehicles, trailers and semi-trailers SOURCE: Office for National Statistics, Business Register and Employment Survey

10. 10 The state of playThe scale of decline LCVs & the West Midlands region Conclusions Important to keep in mind the scale of decline of the West Midlands automotive industry over the past 40 years Design, development and manufacture of LCV will cannot recapture what has been lost Emphasis on wealth generation and not employment

11. 1896 to 1899

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13. 1990 to 1996

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16. 1970 to 1996

17. 17 The state of playThe scale of decline LCVs & the West Midlands region Conclusions Armstrong Siddeley’s Puma Road Entrance with the 1917 Burlington Works latterly occupied by Rolls Royce Aero Engines on the left

18. 18 The state of playThe scale of decline LCVs & the West Midlands region Conclusions Opportunities recognised – projects in place to explore possibilities: o £38m LCVT programme – collaborative R&D o £14.5m CABLED trial of 100 vehicles o £12.5m lightweight technologies programme o £10.2m intelligent transport systems test facility o £10m vehicles customer interface technologies programme o £4.5m niche vehicle R&D programme Aim is to create new and to safeguard existing jobs

19. 19 The state of playThe scale of decline LCVs & the West Midlands region Conclusions Prodrive Ricardo Coventry University WMG AVL Ltd. Potenza Zytek Precision Micro MIRA ARUP CERAM University of Birmingham Microcab Industries LCV supply chain and technology providers LCV Manufacturers Jaguar Land Rover LTI Ltd. Microcab Industries Morgan Motor Company Westfield Sportscars CENEX Existing LCV ‘infrastructure in The West Midlands Region

20. 20 The state of playThe scale of decline LCVs & the West Midlands region Conclusions Activity of this scale and breadth made possible by co- ordinating role of the former RDA Transformative shift to an ‘open innovation model’ Knowledge sharing networks of SMEs

21. 21 The state of playThe scale of decline LCVs & the West Midlands region Conclusions Added value of regional stakeholders working together Capturing economic benefits requires a holistic approach Private sector R&D and HE research excellence Policy famework and collaborative projects Supply-chain and technology providers Low Carbon Vehicle manufacturers

22. 22 The state of playThe scale of decline LCVs & the West Midlands region Conclusions West Midlands well positioned to exploit new opportunities But there are risks? o Formation of LEPs – fragmented governance structures o Potential for disinvestment by foreign owned OEMs o Competition from other UK regions (e.g. The North East) o Lack of dominant LCV technology o Lack of a market - Insufficient demand side stimulus

23. 23 The state of playThe scale of decline LCVs & the West Midlands region Conclusions For example... o BMW ‘i’ vehicle programme o $560 million invested 2010-2013 o Carbon fibre passenger cells o In house electric motor technology o New plants in Leipzig and N. America o Carbon neutral production Moreover, can niche firms in the West Midlands compete with the level of investment being made by major overseas OEMS?