UK Auto Sector Faces New Changes

The UK automotive industry employs around 780,000 people in the design and manufacture of vehicles and components and the supply and distribution chains. Of this number, approximately 250,000 are employed in design and manufacture of vehicles and approximately 530,000 people in the automotive supply and distribution chains.
 
The industry delivered £8.5 Billion of added value to the UK economy in 2004 with automotive output accounting for 9.5% of total UK exports and 1.1% of UK gross domestic product(1). On a regional basis the industry is even more important to the regional economies in which it operates, for example in the West Midlands it accounts for 31.8% of UK automotive employment and is worth £3.3 billion of value add to the regional economy(2). These figures although significant have declined as a result of changes to the global economy, the UK industrial policy and structural changes to the automotive industry over the past 10 years. 

 
Figure 1:Gross Value add of automotive manufacturing to the UK(3)

Over the next 10-15 years the automotive industry globally will under go even greater changes driven by:

·  An acceleration of the application of new technologies to vehicles and the processes related to sales, service and traffic management
·  Increasing competition as new entrants from emerging markets look to technology to leap frog established competitors who are locked into capital bases and working practices based upon more traditional facilities and patterns of employment
 ·  A shift in demand as technology provides more functionality at lower cost and customer buying criteria becomes increasingly sophisticated
·  Increasing legislation that drives adoption of new technologies at an increasing rate