U.K. Auto Industry Sees Good Times Getting Better

U.K. auto makers plan to produce more than 2 million vehicles annually year by 2015, easily passing the record 1.92 million built in 1972.

The Society of Motor Manufacturers and Traders says the industry’s confidence is fueled by multibillion-British-pound investments resulting in expanded production, more new-model introductions and the creation of thousands of new jobs.

More than £5.5 billion ($8.5 billion) has been invested in the U.K. automotive industry in the past 18 months.

The 2015 production forecast, announced ahead of the SMMT international automotive summit, relies on eurozone stability and ongoing government support and collaboration.

Achieving annual vehicle-manufacturing volumes exceeding 2 million units would equate to more than 50% more builds than 2011’s level of 1.3 million.

SMMT CEO Paul Everitt says the automotive industry is leading the U.K.’s economic recovery, with major international investments resulting in increased output, growing export volumes and new jobs being created.

The U.K. auto industry generates about £50 billion ($77.6 billion) in annual turnover. It is the largest sector in terms of exports, generating annual revenues of about £30 billion ($46.6 billion).

In a typical year the industry, employing more than 700,000 people in manufacturing, retail and aftermarket, exports to more than 100 markets and accounts for about 11% of total U.K. exports.

The country is home to seven volume auto makers, three volume commercial-vehicle manufacturers; 11 bus and coach producers, more than 25 niche and specialist vehicle makers and about 2,350 components producers.

Everitt says economic uncertainty across the eurozone is a factor that all businesses are watching closely, but the U.K. to a certain extent is insulated from the worst of demand fluctuations as it exports 40% of its products to countries outside Europe.

“However, it is clear that the ongoing stability and success of U.K. automotive is linked closely to demand from the continent,” he says in a statement.

At the summit, BMW announces its new generation of high-tech, 3-cyl. gasoline engines for the future BMW i8 plug-in hybrid sports car that will be produced exclusively at the auto maker’s engine plant at Hams Hall, near Birmingham.

BMW Sales and Marketing Board Member Ian Robertson says Hams Hall will make an important contribution to the future success of the auto maker’s new “i” brand and its strategy for achieving sustainable mobility.

In his keynote address to the summit, Robertson says BMW Group, as a major U.K. investor, employer, manufacturer and exporter, welcomes continuing joint government-industry initiatives to rebalance the country’s economy, strengthen the manufacturing sector and improve worker training and skills.

Robertson also welcomes the U.K. government’s activities to help stimulate the early market for ultra-low carbon-emissions vehicles and emphasizes the need for continued support in developing the market for electric vehicles.

Nick Pascoe, CEO of Controlled Power Technologies, a U.K.-based company specializing in cost-effective carbon-dioxide-reduction measures for the global automotive industry, describes difficulty in recruiting professional engineers.

The firm is looking for engineers in response to increased demand for its 12-, 24- and 48V modular-hybrid systems.

“Our challenge for the U.K. is not just in finding talent, but (also) in finding engineers with the right skills right now, or face the consequence of supplier research and development activity potentially being lost to non-U.K.-based businesses,” Pascoe says in a statement.

A poll of 1,000 manufacturers conducted by the Institution of Mechanical Engineers showed 76% of the companies said they were recruiting, and 63% said they were struggling to recruit suitable chartered or incorporated engineers, he says.

Among the engineers joining CPT are Peter Scanes as hybrid product group manager. He will have responsibility for commercializing the company’s next-generation stop/start technology.

Scanes previously was engineering program manager for Europe at Azure Dynamics, where he was responsible for Ford’s Transit Connect electric van.

CPT is a spin-off from the advanced powertrain development team established in the U.K. more than 10 years ago by Visteon, Ford’s former components-making subsidiary, and its technology-development partner Emerson, whose motor business later was acquired by motor manufacturer Nidec.