Automobile

SMMT: UK’s specialist vehicle sector most varied in the world | Automotive World

The UK’s low volume and specialist vehicle manufacturing sector is the most diverse anywhere in the world, producing a wide variety of products, according to a new report launched today by the Society of Motor Manufacturers and Traders (SMMT)

The UK’s low volume and specialist vehicle manufacturing sector is the most diverse anywhere in the world, producing a wide variety of products, according to a new report launched today by the Society of Motor Manufacturers and Traders (SMMT).

SMMT’s Low Volume and Specialist Vehicle Manufacturers Report outlines how Britain is a world leader in producing low volume, high value vehicles, everything from 250mph hypercars to campervans, limousines to electric taxis, motorhomes, wheelchair accessible vehicles, hearses and an unrivalled range of high performance, sports and luxury models.

In addition to some of the world’s most famous and desirable car brands, the UK also has undoubted strength in vehicle conversions and is home to Europe’s leading conversion company. All told, this vibrant sector turned over some £4 billion last year, employing more than 15,000 people in highly-skilled, well paid roles to produce over 28,000 cutting-edge products, even amid a global pandemic.1

As in previous years, most of these vehicles were built for global export, with companies enjoying a more balanced overseas footprint than larger OEMs. 87% of the UK’s low volume, premium and specialist vehicles made in 2020 were exported to overseas markets, including the EU, US, Asia and Middle East.2

To sustain innovation and keep attracting buyers from around the world the sector spent some £625 million on research and development (R&D) last year alone.3 This investment drove a number of innovative developments, such as the UK’s first electric vehicle to be made from recycled carbon fibre and the first British all-electric hypercar.

The UK’s low volume and specialist manufacturers have often led the way in introducing new ideas and applying high-performance technology to road vehicles. These include aerodynamic designs, light-weighting and safety concepts which are often honed on the racetrack before being rolled out to the mass market.

Together, the UK’s low volume and specialist manufacturers sustain a significant nationwide supply chain supporting many more thousands of jobs. A significant percentage of the parts and components that go into vehicles made by the sector are sourced locally, and the value added by some conversion companies can be more than £15,000 on a single vehicle.

SMMT: UK’s specialist vehicle sector most varied in the world | Automotive World

Whilst these and all other vehicle manufacturers are committed to driving down CO2 emissions and improving air quality, the looming end of sale of new internal combustion engine cars and vans in the UK and EU poses a sizeable challenge for low volume and specialist brands, given their longer-than- average production life cycles, tight profit margins and occasional difficulties in accessing new technologies from third parties rather than developing them in-house.

The significant cost of this transition, combined with the race to include ever more connectivity in modern vehicles, means that many of the brands in this sector face acute development challenges without the economies of scale – and deeper pockets – that mass market manufacturers would enjoy.

These small producers usually make less than 10,000 vehicles a year each for global markets, yet face the same regulatory frameworks and timescales as the volume players. This is why they need suitable support if they are to prosper on the Road to Zero.

Mike Hawes, SMMT Chief Executive, said,

The UK has a world-class automotive sector and the many low volume and specialist manufacturers are among its most valuable assets. The industry is at a critical moment as companies transition at pace to a zero-emission future and we must protect and preserve the diverse nature of these businesses who add to the lustre of the UK industry.

Fundamental to the competitiveness of the sector is the need to ensure any regulation is appropriate and reflects the unique circumstances of these low volume, high value manufacturers. This is particularly important as we negotiate new trade terms with key overseas markets, many of whom would look on enviously at our strengths in this sector. Furthermore, given the technological transition underway, these companies, like the rest of the industry, need specific support for workforce retraining and reskilling to ensure they are fit for the future.

To maintain competitiveness, the UK’s low volume and specialist vehicle manufacturing industry must ensure it has barrier free access to global markets, crucial for such an export-led sector. Thanks to decades of EU membership, European countries recognise these companies’ specific needs but this must be replicated elsewhere as the UK, now outside of the EU, pursues its own standards, targets, and regulatory agenda.

The needs of these companies, therefore, must be part of discussions as the UK seeks to negotiate new Free Trade Agreements (FTAs) so that standards and regulations work in their favour. Moreover, this critical section of the industry estimates that a significant proportion of its workers will need upskilling or reskilling by 2030 as firms transition to using new electrified technologies, so a focus on this area is also absolutely essential.

SOURCE: SMMT

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