Commenting on today’s announcement by the Government, that it will inject £500m into the UK automotive sector - matched by a further £500m by the industry over the next 10 years into the Advanced Propulsion Centre - John Leech, Birmingham-based UK head of automotive for KPMG, said:
“Today’s announcement sends a powerful message in support of the UK automotive industry’s ambitions. This is a further commitment from the Government (the Government announced a £500 million injection of funds into key sectors in March 2013) that it is right behind the UK’s booming automotive industry, which according to figures from the SMMT, saw double digit growth of 13% in the last year, and now employs 275,000 employees. The UK has a strong automotive heritage and is now home to many companies working on advanced technologies, most notably low-carbon vehicles and lightweight materials where the Government is focussing its support.
“The creation of the Advanced Propulsion Centre will further compound the UK’s position as leading the technological development of low emission engines and will help create a forum for collaborative working across the industry similar to the structures seen in Germany.
“The Government has done a good job at getting the buy-in of all the major automotive companies based here in the UK. Yet, others outside the industry may query why it is necessary to provide further government support, given that car manufacturers have announced over £6 billion of private investment, which will create a large £3 billion commercial opportunity for suppliers and lead to recent UK investments by suppliers such as BorgWarner, Lear Corp, TRW and GKN to name but a few.
The answer is that suppliers are looking for confidence in the long-term future of the UK automotive industry. Government financial backing of emerging propulsion technologies, together with a forum for ongoing collaboration between Government and the industry, sets an environment for investment to flourish not just today but for the rest of this decade and beyond.
“However, if the UK is to continue to play an important role in the automotive supply chain then it needs to begin investing to achieve a global footprint. The anticipated new tooling loans being developed by some of the UK’s corporate banks will assist in helping those companies ambitious enough to take this step forward and help reserve a future.
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