SECTOR FOCUS • FACT-FILE

• The UK automotive sector is worth more than £11bn to the economy and is ranked fourth in Europe and twelfth globally

• Around 140,000 people are employed directly in the UK automotive manufacturing industry

is upbeat about its prospects. Recording a 33 per cent year-on-year improvement in Europe and 38 per cent in Asia-Pacific, the group’s continued growth should impact favourably on the UK, where all of its main manufacturing sites and half of its supply chain spend is.

“JLR is producing 315,000 cars...

The company says it is committed to investing in skills, engaging more than 22,000 students and 3,000 teachers in the UK each year through its Education Business Partnerships. It started more than 2,000 apprenticeships and hired over 300 engineering graduates last year. During the course of 2012, nearly all of the major UK-based auto makers announced new jobs as investment, worth around £10bn in recent years (three-quarters of it at JLR), was ramped up in response to increasing levels of global demand. JLR announced 1,100 new jobs at Castle Bromwich in the West Midlands, to support the launch of new Jaguar models, while BMW confirmed a further £250m of investment at its Oxford, Swindon and Hams Hall facilities to expand Mini production. These announcements followed major new investments by JLR at Halewood, Nissan at Sunderland, Honda at Swindon and Vauxhall at Ellesmere Port.

Although European demand has fallen off this year, it has failed to dent the overall picture for the UK-based manufacturers. Principally, this is because two of the biggest producers of luxury cars – JLR and BMW – are targeting the US and the fast-growing economies of China, India and Brazil. “JLR is producing 315,000 cars at its Halewood in Merseyside and Solihull plants in Birmingham, but is looking to increase that by 100,000, and BMW is looking to increase its current production of 250,000 models at Oxford,” says Harrold.

Honda remains committed for the long-term despite the current challenges of the European market which meant the company recently had to trim its UK workforce to 2,700 after recruiting an additional 500 people last year. The company initially formed an alliance with Rover Group in the 1980s to learn about the European supply chain, the strength of the markets and the quality of the work force. “We established an engine plant in 1989 and first started car production in 1992,” says Ken Keir, executive vice president, Honda Motor Europe which has invested £1.55bn so far in the UK. “The reasoning is three-fold; Honda’s philosophy is to build cars where we sell; the UK is Honda’s main market in Europe; and there is also the quality of the workforce, supply chain and component manufacturers,” explains Keir. GM, which owns Vauxhall in the UK, has a long-term view of production here too. In a recent interview, Phil Millward, HR director of Vauxhall Motors, said: “The company has already secured around £1bn of new supply contracts with UK-based suppliers for parts for Vauxhall’s Ellesmere Port plant on the Wirral, currently making 100,000 Astra models and planned to eventually reach 200,000 a year and its Luton plant making the Vivaro van which sees a new generation vehicle starting at the end of this year.”

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BMW is looking to increase its current production of 250,000