Roddy Graham's blog: 11 September 2012 - UK manufacturing back on track
11 September 2012
Roddy Graham is commercial director of Leasedrive Group and Chairman of the ICFM
For the first time in 36 years, the value of UK car exports exceeds that of imports.
UK vehicle manufacturers now export some 80% of their production, selling around 20% in the UK domestic market. That's a remarkable achievement and a major contribution to redressing our balance of payments at a time when we are going through the worst economic time since the Great Depression.
Now that's what I call the best U-turn the UK automotive industry has done in many a decade!
Given the familiar reasons for the demise of our once great automotive industry - lack of investment, complacency, union strike action, poor management, stop-go economics, short-termism - this is a remarkable turnaround indeed.
So what has set the UK Automotive PLC back on the road to success? Foreign-owned vehicle makers.
Firstly, the Japanese - Honda, Toyota and Nissan. Then the Germans, led by BMW. Common to all their approaches was the need to do it their way.
Japanese management, Japanese productivity, Japanese quality control to ensure that the Japanese brand quality was not lost through poor British practice. Ditto German design and German engineering.
Alongside plants in Swindon, Burnaston Sunderland and elsewhere sprang up a loyal band of 'just-in-time' suppliers who could match the quality expectations of the 'new domestic' vehicle producers.
Later still, the UK automotive industry enjoyed Indian investment when Tata acquired Jaguar Land Rover (JLR).
The result is a new, invigorated UK automotive industry driven by innovative design, modern processes, cutting-edge technology, all ably supported by a modern supply chain.
In the last 18 months, the UK automotive industry has announced £4.5bn in new investment. BMW is investing in its Hams Hall, Oxford and Swindon plants, Honda in Swindon, JLR in Halewood, Nissan in Sunderland and Vauxhall in Ellesmere Port.
As recently as July, JLR announced the creation of 1,100 new jobs at Castle Bromwich. And with the supply chain in close harmonious investment support, the good news factor is of London 2012 Olympian size proportions!
Contrast all of this with what is happening on continental Europe and you begin really to appreciate in what great shape UK Automotive PLC is in right now. So what can go wrong?
Well for a start, the industry could do with the Government pursuing long-term economic strategies and the City looking beyond its next dividend pay cheque.
UK Automotive PLC needs to ensure that it also continues to learn from the well-documented mistakes of the past, continues to invest for the future in research and development and modern production techniques.
This year, UK vehicle manufacturers are destined to produce in excess of 1.5m units, their best performance for over a decade.Industry insiders and analysts do not consider it beyond the realms of possibility that this figure could be doubled in the decades ahead with a fair wind and sustained investment to make output not only attractive to buyers but also competitively-priced to boot.
Now while the vast majority of output will continue to be exported to the benefit of UK PLC that cannot be bad for the fleet industry either.
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