The UK automotive sector – challenges and opportunities  

UK automotive industry
UK automotive industry

The UK automotive industry has had a pretty turbulent time of it lately, but as is often the case in times of change, new opportunities arise writes Luke Hampton, senior supply change manager at the SMMT.

There is no doubt that these are challenging times for the UK automotive industry – as Brexit looms large, we also face escalating global trade tensions and economic headwinds, as well as the fight to stay ahead in the global technology race. But, at this time of great transformation for automotive worldwide, there are plentiful opportunities, too.

In the UK, we are already well placed to be a leader in connected and autonomous vehicle (CAV) development, with more than £500 million committed by industry and government to CAV R&D and testing. Autonomous driving trials are taking place in our major towns and cities; we are home to four major CAV test beds and have more than 80 collaborative R&D projects underway.

Luke Hampton

The industry has also invested billions in developing the latest, low, ultra-low and zero emission powertrains, and the UK wants to be at the front of research and development, as well as the testing and implementation, of these new technologies.

One of the world’s best-selling electric cars is made here in Britain, and the county’s largest car manufacturer recently announced a huge investment to make electric vehicles in the Midlands. However, the ongoing economic and political uncertainty risks our position as a global automotive leader. To stay at the forefront of the competition we need stability and the right business environment to encourage investment.

The fundamental strengths of this industry have not changed – the auto sector in the UK generates more than £101 billion in trade, makes up 14.4% of the export market and supports 823,000 jobs across the country. We have some of the highest productivity levels in Europe and great expertise in engineering some of the world’s most sought-after brands.

Ongoing collaboration to create a competitive business environment and thriving market, combined with an ambitious automotive-focused trade strategy, could trigger a 20% uplift in the industry’s global trade value – worth £20 billion, if the sector can maximise its full capacity.

Looking to the future

Just over a year ago the Government announced a new goal for the country to reach net zero emissions by 2050, an ambitious target that included plans to move away from conventional internal combustion engines to zero emission powertrains.

Industry is leading this shift, introducing increasing numbers of ultra-low and zero emission vehicles, but this is about market transformation with a transition that needs careful management and full government support. We also need to enlist all technologies at our disposal, from battery electric to hybrid to hydrogen.

Policymakers must continue to work in partnership with the sector, through the industrial strategy, focusing on those actions that will deliver the greatest benefits to our industry and the UK as a whole. It means supporting the transition to zero emission vehicles by investing in charging infrastructure, increasing consumer incentives and securing a giga-factory in the UK to help retain a globally advanced electric vehicle supply chain.

The industrial strategy and automotive sector deal will help the industry meet some of the many global challenges it faces. It strengthens UK automotive’s partnership with government, giving a much-needed boost to sector-specific skills and the supply chain, and new investment to keep the UK at the forefront of designing and making electric, connected and autonomous vehicles.

The pace of technological change isn’t just to be seen in our products, however – new technology is also transforming our factories and offices. The rollout of intelligent robotics, 3D printing and artificial intelligence, combined with new approaches to data management, will help manufacturers and the supply chain to save time, boost productivity, reduce waste and costs, and respond more effectively to consumer demand.

These technologies will also reduce plant maintenance and machine downtime, enable faster product planning and more accurate forecasting of customer needs. Customers, meanwhile, will enjoy greater levels of personalisation, more product content and connectivity, service that is more responsive and even shorter waiting times for new models.

According to SMMT’s report ‘The Digitalisation of the UK Automotive Industry’, commissioned from KPMG, by embracing digitalisation, the automotive manufacturing sector as a whole stands to gain £6.9 billion every year by 2035, with a cumulative benefit to the wider economy of some £74 billion.

This is a significant prize, but there are challenges to be overcome by industry and government if it is to be realised. The UK’s digital infrastructure needs to be improved, the skills gap addressed and investment in digitalisation accelerated.

Supporting the industry

SMMT is doing everything it can to support and boost the industry, including its vital supply chain. Earlier this year the Department for Business, Energy and Industrial Strategy (BEIS) chose the National Manufacturing Competitiveness Levels (NMCL) programme as the mechanism to deliver its national supplier competitiveness and productivity improvement initiative.

Led and match-funded by industry, and with the backing of 25 of the UK’s largest manufacturers, NMCL has been jointly developed by the automotive and aerospace sectors for application across all areas of manufacturing. NMCL Automotive, delivered by SMMT, is the programme for the automotive sector and will make use of the £16 million of government funding to develop sustainable and internationally competitive UK supply chains.

The new NMCL approach has already been successfully piloted by companies in the North West of England and expressions of interest are now open. More details can be found online at

Other SMMT activities include our annual Meet the Buyer event that matches suppliers with manufacturers, as well as the revised Automotive Supplier Finder service. The largest online supplier directory in the UK for automotive features 9,000 companies, allowing easy requests for quotes and information and covering categories as diverse as HR, R&D and product engineering among many others.

Despite the challenges, the UK automotive industry’s fundamentals remain strong and if we’ve learned anything in recent decades it’s that UK automotive is constantly evolving and adapting and should never be counted out. What we need now is an internationally competitive business environment to encourage more investment, more innovation and more growth.

SMMT is the voice of the UK motor industry, supporting and promoting its members’ interests, at home and abroad, to government, stakeholders and the media. It represents more than 800 automotive companies in the UK.




Related Articles

Environmentally friendly

Aluminium ingot manufacturer Norton Aluminium has appointed Trevor Bird as its new general manager.
6 years ago News
Most recent Articles

Long-travel clamp for automated production

A hydraulically-actuated, double-acting clamp with a long travel, ideal for workholding in production systems having robotic or otherwise automated component load/unload, has been introduced by Roemheld.
20 hours ago News

Login / Sign up