Political conditions undermining investor confidence, finds latest Automotive Council International Competitiveness Study

28 November 2018

Britain’s automotive talent is among the world’s most adaptable, with the industry’s long history of engineering excellence and strong labour relations the envy of competing nations, according to new research published by the Automotive Council. Urgent action is needed, however, to address skills shortages and restore necessary political conditions to maintain competitiveness and attract future investment.

The second UK Automotive International Competitiveness Report, which ranks the UK’s attractiveness for automotive investment against other European and global countries, places the UK’s automotive labour flexibility in top position in Europe and second in the world behind only the US – an advantage supported by equally strong labour relations. Workers’ willingness and ability to adapt to changing market conditions is a key strength, providing flexibility within working patterns, vital in this precision, just-in-time industry.

Meanwhile, in line with its strong record on innovation, the report also places the UK sector top in Europe – and second globally – for collaboration with academic institutions. Britain is home to four of the EU’s five leading universities and, together with government-industry funded institutions, including the Advanced Propulsion Centre and the Catapult network, which help spearhead collaboration in electric and connected and autonomous vehicle development, this is a highly attractive proposition for inward investment.

However, the report also flags risks to future competitiveness, including shortages of skilled engineers, levels of government investment into R&D and declining political stability following the UK’s decision to leave the EU. Previously, the UK’s political stability was perceived as a strength by investors.

If Britain is to remain a leader in vehicle production, collaborative action is needed to maintain core skills in the existing workforce, while also developing and attracting new skills essential to drive the industry’s leadership in the shift to electrification, autonomy and digitalisation. This is reflected in government’s Industrial Strategy and Automotive Sector Deal, including efforts to boost supply chain productivity and competitiveness with the new industry-led £16 million National Manufacturing Competitiveness Levels (NMCL) programme aimed to roll out later this year.

Tony Walker CBE DL, Chair of the Automotive Council’s Business Environment and Skills Group, and Managing Director, Toyota Motor Europe – London Office, said,

“Britain’s world-class automotive workforce and commitment to continual improvement and innovation have helped drive the sector’s success. We have a hard-won reputation for developing and making high quality, cutting-edge vehicles, engines and components, supported by strong collaboration with government through the Automotive Council. During this period of profound change, that collaboration will be more important than ever. The focus now must be on attracting and nurturing the right skills to meet our ambitions, and on securing a Brexit deal that delivers the political stability needed to attract future investment.”

The UK Automotive International Competitiveness Report is based on a survey of UK automotive companies across eight Key Performance Indicators of particular importance for investment decisions. These include, labour productivity and flexibility; availability of skilled labour; university-industry collaboration; government investment in R&D; and R&D incentives.

Soon to enter its 10th year, the Automotive Council was formed in 2009 as a collaborative partnership between the automotive industry and government to align strategic priorities and shape the future for the UK’s automotive sector. Government engagement with industry has played a crucial part in the resurgence of automotive manufacturing in the UK, and through the Industrial Strategy and Automotive Sector Deal, this collaboration will be crucial to ensure the industry’s future competitiveness and success.

The full report can be downloaded by clicking here HERE

The KPI Dashboard HERE

And the full index of competitiveness drivers HERE