society of motor manufacturers and traders limited 71 great peter street london sw1p 2bn society of...

Society of Motor Manufacturers and Traders Limited71 Great Peter Street London SW1P 2BN

SOCIETY OF MOTOR MANUFACTURERS AND TRADERS LIMITED

The UK Automotive SceneSupplementary data for Auto Expo 2012

SOCIETY OF MOTOR MANUFACTURERS AND TRADERS LIMITED PAGE 2

UK Market Overview - 1

• 31 key vehicle manufacturing sites: seven volume passenger car, 11 commercial vehicle, bus, coach and taxi manufacturers.

• Global base for engine manufacture, 2.3m. in 2010.

• 19 of the world’s top 20 industry suppliers and 7 global volume vehicle manufacturers located in UK.

• Motor sport cluster for development and manufacture: eight F1 teams supported by >300 specialist motorsport companies.

• Many foreign vehicle manufacturers now have UK-based R&D centres: Nissan at Cranfield; Ford at Dunton; SAIC at Longbridge; Changan at Nottingham; TATA at Warwick. – and Jaguar-Land Rover

• Creation of UK Automotive Council – framework for collaboration with Government to improve the UK investment offer and positioning of UK as centre for ultra low carbon development.



• Majority of UK automotive manufacturing foreign-owned.

• Mature market, 4th largest car producer in EU*.

• Exports average >£25 billion annually, over 10% of UK exports.

• 2010 car production nearly 1.3mn, up from <1m in 2009 recession; exports have increased from c65% 2000 to >75% in 2010.

• Commercial vehicle production consistently > 200,000 between 2004-8, but just 90,000 in 2009 (not supported by scrappage scheme). 2010 production back to c123,000, with exports c70%.

• UK had fourth highest R&D spend in Europe at over £1.5 billion p.a.

* Source OICA



SMMT 12th Annual Sustainability Report 18 signatory companies - across the broader industry, shows year on year:

• Manufacturing turnover up 20% to £49bn.• Output up 27.8%, returning to pre-recession volumes.• Number of vehicles exported up 31%, totalling £29bn in value.• Energy use per vehicle produced down 8%.

• Manufacturing CO2 emissions down 10.5% per vehicle produced.

• Manufacturing waste to landfill produced per vehicle down 8%.• New automotive apprenticeships up 9% adding to the 737,000 jobs

dependent on the sector.


Key elements of the sector

• Strong independent design engineering and testing base.• Significant foreign manufacturing investment and R&D investment /

spend.• Efficient manufacture and high export ratios of both volume and

premium / niche vehicles.• Strong powertrain sector with technological innovation and scale.• Low carbon technology and electric vehicle development and

manufacture, with strong government support.• Comprehensive OEM aftermarket component manufacture,

distribution, service and repair capacity.• In depth HE academic study & research and FE sector training.• Highly sophisticated retail and distribution logistics import / export

services.


UK Production

Restructuring, Rebirth, Recession, Recovery

90 91 92 93 94 95 96 97 98 99 '00 '01 '07 '08 '09 '10 '11 '12 '13 '14 '15 '160.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8SMMT Production Outlook 2011 - 16

Veh

icle

Pro

duc

tion

in M

illio

ns

Years


Long-term commitment to UK – major announcements in 2010-11

• BMW: £500m investment across all 3 UK facilities for the 3rd generation MINI; expansion of

range to include Coupe and Roadster Minis

• Ford: 5 year £1.5bn investment in engineering and manufacturing facilities.

• GM: next generation Vivaro confirmed for Vauxhall’s Luton plant from 2013/4.

• Honda: commitment to new Civic and CRV, following total £1.4bn investment at Swindon.

• Nissan: £420m investment to make LEAF and batteries; £192m investment for new Qashqai

• Tata JLR: retaining three vehicle assembly sites, build new engine factory, widen product

range, creating >2,000 new jobs; >£2bn of supply contracts for the Range Rover Evoque;

£490mn investment for C-X75 hybrid supercar

• Tata: establishment and expansion of European Technical Centre.

• Aston Martin: Cygnet production to create 150 new jobs; Rapide production moving to Gaydon

from Austria.

• McLaren: MP4-12C to be produced in Woking.

• SAIC MG: MG6 GT to be designed engineered and assembled in Longbridge.

• Optare: new 1,200 capacity bus manufacturing facility in Yorkshire..


Key issues for the UK automotive industry

• Economic crisis in Europe, USA, Japan, alongside market decline / overcapacity in some markets.

• Sustainable Government support? Problems with suppliers’ access to finance.

• Low cost economy countries / High growth markets – both opportunity and competitive threats.

• Local supply chain fragmented - erosion “hollowing out”/ overseas head office decision making.

• Some SMEs lack global trade awareness / global competitiveness / skills and training.

• Maintaining manufacturing efficiency, investment in UK based design engineering, research and development.

• Environmental / Low carbon legislation, Alternative fuels, ICE hybrids, Electric vehicles.


Key UK technology opportunities

• Build and retain capacity in “sticky” technologies , ie:– Energy storage and management– Electric motors and power electronics– Lightweight technologies– CO2 and emissions reduction technology

• Other key technologies in which UK has potential:– In-vehicle communications and management systems,

driver communications; congestion warning systems; navigation; telematics.

– Materials; composites and alternative materials / jointing technology

– Environmental protection / emissions– Rapid prototyping and manufacturing process improvement.


Changing Dynamics of UK Car SectorDemise of the old UK ‘Big 3’ - Growth of Japanese & BMW

1972 1982 1999 2006 2007 2008 2009 20100

500

1000

1500

2000

2500 Others

BMW

Honda

Toyota

Nissan

Land Rover

Jaguar

Vauxhall

Peugeot

Ford

Rover

UK

Veh

icle

Pro

du

ctio

n in

Th

ou

san

ds


UK vehicle manufacturers’ product ranges

VOLUME CARS• BMW - Mini range, incl. Clubman, Coupe and Roadster• Honda - Civic, CR-V & Jazz• Jaguar – XJ, XK XF• Land Rover - Defender, Discovery, Freelander, Range Rover,

Range Rover Sport & Evoque • Nissan – Note, Qashqai & Juke (and Leaf electric from 2013)• Toyota - Auris, Auris Hybrid & Avensis• Vauxhall – Astra

COMMERCIAL• Alexander Dennis - buses & coaches• Dennis Eagle - refuse trucks• Ford - Transit van, Transit Minibus• Vauxhall – Vivaro van and minibus, plus Renault Trafic

versions• Leyland Trucks - trucks• London Taxis Int - TX4 taxi and hydrogen fuel cell

demonstrator• Optare - single & double deck buses• Wrightbus - buses

PRESTIGE / NICHE LOW VOLUME CARS• Aston Martin - DB9, Vantage, Virage, Cygnet • Bentley – Continental, Mulsanne • Caterham - Classic, Super 7• Ginetta - F400, G50EV & G50R road cars & G20, G40, G40

Junior, G50 & Zytek race cars• Lotus - Elise, Evora, Exige ; new Elan, Elise & Esprit • McLaren Automotive MP4-12C sports car (from 2011)• Morgan – Supersports, 4/4 Sport, 4 seater, Plus4,

Roadster & Roadster Sport sports cars• Rolls Royce - Phantom & Ghost• SAIC - MG6 saloon

FORMULA 1• McLaren racing• Mercedes F1 - formerly Brawn• Red Bull • Williams F1• Renault F1• Force India• Lotus F1• Virgin Racing


Engine manufacture

2.39 million engines manufactured in 2010 (up 16% from 2009). Key manufacturing plants include:

• Ford, Dagenham & Bridgend 1,640,197

• BMW, Hams Hall 385,051

• Honda, Swindon 136,658

• Toyota, Deeside 114,254

• Nissan, Sunderland 105,766

• Cummins, Darlington 43,525

• VW, (Bentley) Crewe 4,791


UK Design and Engineering Skills

• Product planning and development.

• Vehicle conceptualisation and styling.

• Rapid prototyping services.

• Manufacturing engineering/feasibility.

• Structural analysis & vehicle simulation.

• Vehicle body, chassis, powertrain & trim.

• Vehicle component development.

• Electrical and electronics, chip designing.

• Engine engineering.

• Testing and validation, homologation.

• Special training packages (for CAE, CAM).


UK Car Production

• Car output in 2010 increased 27.1% to 1,270,444 (2009 - 999,460)

• Nissan highest production at 423,262 – increase of 25% on 2009

• Export market is 75.7% of production

'99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '100

200000

400000

600000

800000

1000000

1200000

1400000

1600000

1800000

2000000

30%

40%

50%

60%

70%

80%

90%


UK Commercial Vehicle Production

• 2010 production increased by 35.7% at 123,019 vehicles

• Vauxhall and Ford = 85.7% of all CV production

• Export market is 69.5% of production (2009 77.5%)

'99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '100

50000

100000

150000

200000

250000

30%

35%

40%

45%

50%

55%

60%

65%

70%

75%

80%


Vehicle production – moving annual total

2006 2007 2008 2009 2010 2011600

800

1000

1200

1400

1600

1800

Total Export

'000

s

2006 2007 2008 2009 2010 201150

100

150

200

250

Total Export

'000

s

Car production rolling year total CV production rolling year total


UK supply chain

• About 80% of all component types required for vehicle assembly operations can be procured from UK suppliers.

• The supply chain represents about 40% of the retail price of a passenger car.

• The UK automotive supply chain typically generates £4.5 - £5bn of added value annually.

• Around 2,350 UK companies regard themselves as ‘automotive’ suppliers, employing around 82,000 people.

• It is estimated that every job in a vehicle’s assembly supports 7.5 elsewhere in the economy.


Production Exports / Registration Imports

The UK increasingly manufactures cars to export and imports cars to drive

76% production exported - 85% registrations imported

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

ExportsImports

% o

f ve

hic

le p

rodu

ctio

n an

d re

gist

ratio

ns


UK New Car Registrations

• In 2010 the car motor parc was 31.14m (2009 31.04m)

• Diesel market remains strong for lower medium and above

• Super mini remains UK largest sector purchase (36.4%)

• MPV and 4x4 SUV market share continues to rise

• Hybrid and EV demand only slowly increasing and replaces LPG demand – AFV registrations in 2010 were 22,865 – 1.12% market share, of which 167 were Electric vehicles.

• Ford Fiesta, Vauxhall Astra and Ford Focus top 3 cars

• Market in 2010 has risen 1.8% to 2.03m vehicles matching 2009 SMMT prediction


November 2011 Registrations - new cars

market down - but fuel efficiency better than ever

• New car demand fell by 4.2% in November to 134,000 units, but was some 5,000 units above forecast.

• Diesel and alternatively fuelled cars both took record market shares in the November market.

• Average new car fuel efficiency improved 29.3% in last 10 years, giving the highest ever mpg.

• New car registrations over the first 11 months of 2011 were down 4.5%, at 1,822,000 units.

• Market looks set to better full year forecast of 1.923 million units, but caution remains over 2012.


November 2011 Registrations van and trucks

market continues upward trend, growing 19.1%

• Van and truck registrations up 19.1% to 27,187 units in November, rolling year up 18.6% to 300,331.

• Truck registrations up 21.5% to 4,503 in November month, rolling year up 24.4% to 41,507.

• Van registrations up 18.6% to 22,684 units in November, rolling year up 17.7% to 258,824.


New car registrations

• The scrappage scheme helped support volumes.• Market down 7.3% to May and set to end 2011 at 1.93 million units.

New car registrations, 12 month moving annual total 2008 to 2012

Market stabilised, at lower level

Dec-0

8

Feb-0

9

Apr-0

9

Jun-

09

Aug-0

9

Oct-0

9

Dec-0

9

Feb-1

0

Apr-1

0

Jun-

10

Aug-1

0

Oct-1

0

Dec-1

0

Feb-1

1

Apr-1

1

Jun-

11

Aug-1

1

Oct-1

1

Dec-1

1

Feb-1

2

Apr-1

2

Jun-

12

Aug-1

2

Oct-1

2

Dec-1

21750

1800

1850

1900

1950

2000

2050

2100

2150

2200

UK new car registrations 2008 to 2012 - actual and SMMT forecastsrolling year totals - moving monthly annual totals

Actual dataSMMT forecast (Oct 10)SMMT forecast (Jan 11)SMMT forecast (Apr 11)Series5

reg

istr

atio

ns

in t

ho

us

an

ds


New car registrations

• Scrappage in place May 2009 to March 2010 (with some overhang).• Represented almost 15% total sales over that period.

New car registrations, 2009 to 2011, with scrappage identified (Source SMMT)

Impact of scrappage scheme

J F M A M J J A S O N D0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,0002008 SIS 2009 SIS 2009 2010 2011

2011 forecast


Automotive Council – www.automotivecouncil.co.uk

A very powerful industry and government partnership

Has helped to transform automotive business environment to provide a more compelling investment proposition for related industries;

• Expanding technology roadmaps for low carbon vehicles and fuels, to help promote the UK as a strong candidate to develop these and other technologies;

• Developing commodities roadmap helping to develop a stronger and more competitive automotive supply chain;

• Providing a very strong public voice for the industry to support the value of the industry to the UK and to global partners;

• Ensuring high level, strategic, continuous conversation between government and the automotive industry in the UK.


Moving to a lower carbon transport network

Meeting EU legislation:

• Average of 144.2g/km in 2010 – 3.5% down on 2009 and 20.3% on 2000.

• Q1-3 2011 at 138.5g/km, down 4.0% on 2010 and 23.5% on 2000.

• 130g/km by 2015, the equivalent of 58mpg with a diesel engine and 52mpg in a petrol car.

• 65% of new cars averaging the 130g/km target by 2012 rising to 100% in 2015.

• Manufacturers exceeding the targets will be heavily fined per additional gram of CO2 emitted, for every car registered across Europe.

• Specialist targets for small volume and niche manufacturers.


History and levels of Euro standards for carsEuro Standards

Entry into force (new type approvals)

Emission limits

New car types All new cars Petrol NOx Diesel NOx Diesel PM

Euro 0 1 Oct '91 1 Oct '93 1000 mg/km 1600 mg/km (no limit)

Euro 1 1 Jul '92 31 Dec '92 490 mg/km 780 mg/km 140 mg/km

Euro 2 1 Jan '96 1 Jan '97 250 mg/km 730 mg/km 100 mg/km



Euro 5 1 Sep '09 1 Jan '11 60 mg/km 180 mg/km 5 mg/km

Euro 6 1 Sep '14 1 Sep '15 60 mg/km 80 mg/km 5 mg/km


UK air quality is improving

Since 2000 – levels of pollution are falling.

New Car - average CO2 emissions have fallen by over 20% - dropping 3.5% in 2010.

Diesel engines have contributed to this improvement. A car built today (Euro 5), compared to one built in 2000 (Euro 3) has reduced its CO2 by 13% and emissions of other pollutants by at least:

• nitrogen oxides (NOx) 64%• particulates (PM10) 90%• carbon monoxide (CO) 22%

Road transport emissions have also been reduced:• nitrogen oxides (NOx) 40%, • particulates (PM10) 30% • carbon monoxide (CO) 60%.

Source: Government figures (DfT – Transport Statistics GB)


UK average new car CO2 emissions

UK average new car CO2 emissions (Source SMMT)

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD-11

130

135

140

145

150

155

160

165

170

175

180

185

190

CO

2 g

/km


Car CO2 emissions, parc and distance travelled

• Reduction despite increase in distance travelled and parc size since 2000.• Further declines expected, as distance travelled curbed and efficiency

improves.

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 201090

95

100

105

110

115

CO2 Parc Distance travelled

Year

Ind

ex,

2000

= 1

00

Source DECC/SMMT/DfT


Distribution of market by VED bands

Band E (131-140g/km) most common, in 2000 it was Band G (151-165g/km).

Band A (<100g/km) share doubled in 2010 and again in 2011.

Distribution of the new car market by VED bands (Source SMMT)

2000

2010

YTD 2011

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

A B C D E F G H I J K L M

Band A B C D E F G H I J K L M

CO2 g/kmUpto 100101-110111-120121-130131-140141-150151-165166-175176-185186-200201-225226-255

Over 255

Standard rate £ 0 20 30 95 115 130 165 190 210 245 260 445 4601st year rate £ 0 0 0 0 115 130 165 265 315 445 580 790 1000


UK performance vs European average

UK making better progress than EU average.

2010 2009 2000 % ch ‘10 vs ’09

% ch ‘10 vs ’00

UK 144.2g/km 149.7g/km 185.4g/km -3.7% -22.2%

EU 140.3g/km 145.7g/km 172.2g/km -3.7% -18.5%

France 130.5g/km 133.5g/km 163.6g/km -2.2% -20.2%

Germany 151.2g/km 154.0g/km 182.0g/km -1.8% -16.9%

Average new car CO2 emissions across the EU (Source EC)


Existing CO2 Regulations for cars and Vans

EU has adopted CO2 Regulations for cars and vans.

Individual manufacturer targets add up to deliver EU fleet average target.

New car fleet

130g/km in 2015 (19%)

95g/km in 2020 (39%).

New van fleet

175g/km in 2017 (14%)

147g/km in 2020 (28%).


Existing CO2 Regulations for cars and Vans

Important flexibilities• Targets phased in 2012-15 (cars), 2014-17

(vans).

• Derogations for small volume and niche manufacturers: targets consistent with their economic and technological potential.

• Eco-innovations, super credits, pooling.

Integrated approach includes CO2 based tax, consumer information. (labelling new and used cars, databases), MAC, LRRT, GSI etc.


Outlook for car emissionsEU-wide target for 130g/km by 2015 and 95g/km 2020 (subject to IA).

Note EU, not UK specific targets. 38.2% of 2010 UK market <130g/km.

EU-wide van target - 175g/km by 2014-17 and 147g/km by 2020 (subject to review).

0

25

50

75

100

125

150

175

200

2000 2005 2010 2015 2020

g/k

m

UK average new car CO2 emissions and EC wide regulation targets

(Source SMMT/EC)


Next Challenge: Heavy Duty Vehicles (HDVs)

• HDVs are not yet regulated for CO2 in Europe.

• Measurement method is the bottleneck in policy making. Research ongoing, likely to use computer simulation and validate with physical testing.

• EU Commission policy development timetable:

• February/March 2012 - measurement methodology stakeholder meeting.

• May/ June 2012 - draft EU strategy stakeholder meeting.

• End 2012 - impact assessment.

• First half 2013 - Commission to propose strategy.


Longer Term Strategy for 2030 and 2050

EU ambitions and UK binding targets

• EU committed to 20% CO2 cut by 2020 (or 30% if global targets) and 80-95% by 2050.

• UK is legally committed to: • Carbon Budgets for each five year period to 2027.

• 50% CO2 cut by 2025.

• 80% cut by 2050 (both relative to 1990, all sectors)

• (Cannot stop there, need more cuts by 2100).

• UK government will set out it’s strategy to meet the Carbon Budgets (“Autumn Strategy” due 1 December).

• UK Automotive Council technology roadmaps for cars, commercial vehicles, off-highway.


High Level Technology Roadmap - CARS

OEMs share a common view(Individual manufacturers will prioritise certain technologies to fit with brand values)


Low carbon Commercial Vehicle & Off-highway roadmap has parallel technology streams depending on duty cycle

2020 20502030 20402010

UK CO2Target CO2 and GHG reduction

Air Quality Improvements

LD Van CO2 Regulation

Possible HD/MDCO2 Regulation

Dri

vers CO2 reductions limited by

air quality regulations

Fuel cell vehicles

Fuel Cell APUs

H2 infrastructure

Demos Plug in hybrid

Micro/Mild hybrid

Full hybrid

Me

diu

m D

uty

Cy

cle

s

Niche EVs Commercial/Off-Highway EV’s

Lig

ht

Du

ty C

yc

les

Powertrain efficiency improvements/ancillary electrification

Advanced highway vehicle aerodynamics/selective lightweighting

Sustainable liquid/gaseous fuels

Waste heat recovery Advanced thermodynamic cycles

Biofuels

Intelligent vehicles logistics – operational efficiency (On & Off-highway)

He

av

y D

uty

Cy

cle

s

IC Engine efficiency improvements

“Zero” Air Quality Impact

Technology Roadmap

Society of Motor Manufacturers and Traders Limited71 Great Peter Street London SW1P 2BN

SOCIETY OF MOTOR MANUFACTURERS AND TRADERS LIMITED

society of motor manufacturers and traders limited 71 great peter street london sw1p 2bn society of...

Documents