Automotive Report 2015

BDO has produced this report in collaboration with us to get the inside story on the issues shaping the automotive industry, as seen by those at the heart of the action.

The UK automotive industry is one of the nation’s success stories. 2014 saw a return to pre-recession levels for new car registrations (2.5m) and growth of 9.3% over 2013. Car production is rising strongly and is set to pass the 1972 high of 1.92 million cars in 2017. UK automotive manufacturers export around 80% of production, equal to 10% of total UK exports.

However, automotive success is not just linked to manufacturing and sales volumes. The UK is the global hub for the multi-billion dollar motorsports business; it has world-leading technology companies developing low-carbon vehicles and alternative powertrain concepts; and government-led initiatives have been actively strengthening the links between academic research and the automotive industry with the aim of bringing innovation to market faster and more reliably.

Key findings

• The UK automotive industry is spread very widely across the whole country, with concentrations in the West Midlands and South East
• Vehicle registrations in the UK rose by 9.3% in 2014 and the technical managers surveyed by BDO and the Institution are optimistic for continued single-digit growth in 2015
• The majority of growth anticipated for 2015 will come from overseas sales in both existing and new markets. The current percentage is 80%
• UK suppliers account for less than 50% of the UK automotive sector’s supply chain; there are prospects for growth if suppliers can prove competitiveness on quality, cost and logistics
• UK automotive companies on average invest around 6% of turnover on research and development, with a small increase expected in 2015
• Electric and low-carbon vehicles are the highest priority for research spending in coming years, and other powertrain efficiency improvements also feature strongly
• The Government’s industrial strategy for the automotive sector has passed much of the industry by, with only a third aware of it
• Skill shortages are a real issue in the automotive industry at both professional engineer and technician levels
• Automotive groups have been enthusiastic about taking up apprenticeship schemes
• The industry believes the Government is not doing enough to encourage entrants into careers in engineering and technical disciplines