The Future of Automotive: The hunt for new markets

WHILE strong domestic demand continues to bolster the UK’s automotive output, long term all vehicle manufacturers are focused on export volumes as that’s where the largest percentage of their business will be.

The UK automotive industry is in the world’s top 10 countries by turnover and is one of the most dynamic in Europe. Since 2011, the industry has attracted more than £14bn, creating 30,000 new jobs in the process.

Between 70 and 80% of all vehicles produced in the UK are destined for overseas markets, making the industry one of the country’s international trade success stories.

For many export markets, the ‘Britishness’ of the brand is what ultimately sells the product and with many of the major manufacturers looking to increase the number of British-sourced components within their vehicles this obviously presents new opportunities for the SME supply chain.

But in the never ending search for growth, it is the new markets that first have to be identified.

The Society of Motor Manufacturers and Traders (SMMT), keen to support UK manufacturers will this month lead a delegation of specialist UK automotive companies on a trade visit to Seoul, as the industry seeks to strengthen business links and partnerships with Korean companies.

The trade mission comes on the back of a record UK-Korea trading year. Korea is now the third biggest Asian export hub for the UK automotive industry – and the eighth largest export market. British car exports to Korea have grown by a record 476%, with 13,337 vehicles shipped to the country last year compared with 2315 in 2009.

Asia as a whole is now the UK automotive industry’s largest export market after Europe, with 18.5% of all cars destined for the region.

With a high level presence at the 28th Electric Vehicle Symposium (EVS28) this May in Seoul, the SMMT and a selected group of automotive companies will exhibit a diverse range of products, from components to engineering expertise in fields such as power train systems and electrical engineering.

Part of the UK’s competitiveness is its strength in design and development, with OEMs and bespoke R&D companies flourishing here. Crucially, the UK has also become a centre of excellence for the development of advanced low carbon technologies. Some of the leading companies in this field will be exhibiting on the SMMT stand, showcasing the work of some of the UK’s 2500+ component makers.

Strong government support has been an important driver of innovation in the UK automotive sector, with cross government-industry initiatives such as the Automotive Council, Automotive Industrial Strategy and Advanced Propulsion Centre making the UK an attractive place to invest and develop the next generation of advanced vehicle technologies.

Mike Hawes, SMMT chief executive, said: “Economic growth in Korea over the past five years has seen demand for new cars – and vehicle technology – accelerate. A desire for high quality premium vehicles with a strong brand heritage, and for cutting edge components and systems, has placed the UK in a prime position to take advantage of this emerging market. The British automotive industry’s success in Korea and wider Asian markets is down to the high quality of our globally competitive products built with our engineering excellence and our highly skilled workforce.

“The UK automotive sector is ‘open for business’, with an international outlook and a competitive investment environment, as well as tremendous opportunities and talent, all of which attract global partners.”

All this week, TheBusinessDesk.com has joined forces with Lloyds Bank, MHA Bloomer Heaven and Irwin Mitchell to assess the strength of the automotive supply chain whether it is capable of meeting future demands.

Our latest supplement assesses the current state of the industry, what challenges lie ahead for the automotive sector and whether the next Government will commit to the policies which can help to sustain an industry that has undergone a drastic renaissance from the dark days of 2009 when many of the manufacturers were forced to go cap-in-hand to the Government to ask for help to survive.

To download a copy of the supplement, please click here