Why the automotive industry is riding high

In January of this year, the UK automotive industry finally threw off the shackles of the global economic crisis.  According to The Society of Motor Manufacturers and Traders (SMMT), UK car manufacturing grew 3.9% last year to 1,587,677 vehicles, the highest number since 2005.

Over three quarters of those were built for export, that’s despite demand slowing from China and Russia. Demand from Europe increased and now represents over half of all car exports. Over a quarter of exports head over the Atlantic to the US.

“Appetite for British-built cars grew significantly in other key and emerging regions, demonstrating the strength and diversity of UK manufacturing and product,” said the report. 

“The auto sector is the hub of the UK manufacturing sector,” explains Alistair Marshall, Business Manager at Progressive Recruitment. “Manufacturing output for the year is going from strength to strength. Jaguar Landrover is now arguably the leading manufacturer of automotive vehicles in the UK, overtaking Nissan.”  

Earlier this month, Jaguar Landrover reported its best ever January retail sales of 46,016 vehicles, up 24% on January 2015. Andy Goss, Jaguar Land Rover Group Sales Operations Director said:  “Following our best full year global sales in 2015, this is a great start to the new year, with very strong performance from both brands and across all of our key regions. Europe and the UK retailed almost 20,000 vehicles this month alone, driven by solid sales of the XE and the Discovery Sport.”

“This has an impact on the UK economy as a whole,” explains Alistair. “Jaguar Landrover’s record sales will impact all of their supply chain, making them much busier and contributing to the economy, especially here in the Midlands.” 

Techno cars

“What will continue to fuel this growth is the prevalence of new technology in car manufacturing nowadays,” says Alistair. “And how a lot of this is happening in the UK. London’s next generation taxi-cabs, for example, will be hybrid vehicles, such as the battery-powered TX5 model. The TX5 will be manufactured at a new £300m plant outside Coventry – the UK’s first new auto plant in a decade.”

Companies are indeed pouring money into driverless cars. Google leads the field with its cars already being tested on the roads. In February of this year, eight projects were awarded £20 million in funding by the UK Government to develop the next generation of autonomous vehicles. Trials to test driverless cars on the streets are currently being worked on in Bristol, Coventry and Milton Keynes, and Greenwich.

Business Secretary, Sajid Javid, said: “Britain is a world-leader in research and development in such innovative technologies which improve lives and create opportunity for all. That is why this government has protected the £6 billion science budget and is providing up to £20 million for these projects.”

Work is also underway on creating a new generation of batteries to power cars. WMG at the University of Warwick are part of a £19.4m project to support the development of next-generation electric vehicle batteries in the UK. Funded through the Advanced Propulsion Centre (APC UK Ltd), it is leading edge manufacturing research focussed around Nissan's Sunderland battery manufacturing plant.

Skills shortage

However, the UK automotive industry is facing a massive skills shortage. A new report published by the Automotive Council claims that there are 5,000 jobs vacant in UK automotive due to skills shortage, something which could undermine its growth potential. 

Of the top 10 job types for which recruitment is most difficult, the majority are in engineering – with the top two in-demand roles being design and production engineers. The knock-on effect, according to the report, is that companies are hiring temporary contractors and increasingly recruiting from abroad.

“It’s very much a contract-driven market,” says Alistair: “Skills that they’re needing now are very much embedded in software and electronics and are a lot more technology driven.” 

“If you think about technology and wind back to late 90s and the dot.com boom, all the young kids went into computer science. It left us with a shortage of engineers, but people are being attracted back into the automotive sector because of the high amount of technology now involved.  It’s more exciting than it used to be!” 

The Automotive Council report sets out a range of recommendations to tackle the skills shortage. These include the implementation of a co-ordinated approach to STEM (science, technology, engineering and mathematics) subjects in schools, as well businesses ensuring that apprenticeship opportunities on offer from government are maximised.

“There are lots of people coming into the industry with similar skills learnt from the aerospace sector, which is now in decline,” says Alistair: “They have the right background and transferable skills that can be put to good use in the automotive industry.”

“We will find the skills. The UK automotive industry is in great shape. We’ve been building cars for over 100 years, we’ve got the knowledge and the expertise to go into the next generation of car-making,” says Alistair.  

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