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    Driving Force: Success and Sustainability in the UK Automotive Industry FC1

    DRIVING FORCE

    Success and Sustainability

    in the UK Automotive Industry

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    Success and Sustainabilityin the UK Automotive Industry

    2 Foreword

    Industry and Government working together

    4 Introduction

    Europes most diverse and dynamic

    automotive industry

    6 Chapter 1

    A global force

    13 Chapter 2

    World-class productivity

    18 Chapter 3

    Government and industry in partnership

    22 Chapter 4

    People and skills

    25 Chapter 5

    Cutting edge research and development

    31 Chapter 6

    Looking forward

    34 Appendix

    Cover image: SMMT

    Contents

    Driving Force: Success and Sustainability in the UK Automotive Industry 1

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    2 Driving Force: Success and Sustainability in the UK Automotive Industry

    FOREWORDIndustry and Government working together

    Todays industries face challenges on an unprecedented scale.

    Globalisation, the pace of technological change and consumer

    demand have revolutionised the way we do business.

    Knowledge and skills play an increasingly important role in the UKs capacity

    for innovation and growth. And the motor industry in the UK is meeting thosechallenges successfully, measured by its total activity rather than by the

    assembly of the final product. The UK is consolidating its leading position as

    a centre of excellence in the production of vehicles and components, satisfying

    the demand of a vibrant domestic market and providing wider access to the

    rest of the European customer base.

    The UK is an excellent place to do business. It is home to an increasingly

    dynamic industry at the forefront of process improvement, product innovation

    and best practice, delivered by the best people. We have skills and flexibility

    in our workforce, we have the backbone of our world-beating motorsports

    experience, we have the engineering capability, we have a proven track record

    for innovative development, and our designers are world-renowned.

    In addition, the UK Government has created a regulatory and business

    framework which actively encourages home-grown and inward investments.

    It offers an environment where all companies are treated equally, regardless

    of ownership, with the result that no other member state in the EU is home to

    as many manufacturers of vehicles cars, trucks and buses as the UK.

    This publication sets out the facts about the automotive industry in the UK,

    underlining its strengths and capabilities.

    Undoubtedly, global competition provides tough challenges and the UK has

    had to take its share of rationalisation including well-publicised plant closures.

    But the overall story is one of remarkable adaptability and resilience basedon continuous development and openness to world markets. By working

    cooperatively, government, industry and academia are ensuring that the UK

    builds on this automotive success story and continues to provide a home for

    competitive automotive manufacturing and sustainable mobility.

    Margaret Hodge

    Minister of State for Industry and the Regions

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    Driving Force: Success and Sustainability in the UK Automotive Industry 3

    The UK is an excellent place to do business.It is home to an increasingly dynamic industry at the

    forefront of process improvement, product innovation

    and best practice, delivered by the best people.

    DTI

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    4 Driving Force: Success and Sustainability in the UK Automotive Industry

    INTRODUCTIONEuropes most diverse

    and dynamic automotive industry

    The sector has two distinct parts: the manufacture of vehicles

    and components; and the motor trade (including retail,

    distribution and aftermarket services).

    In the case of manufacturing,

    Britain leads Europe as the mostdiverse and productive vehicle

    manufacturing location and as a

    global centre of excellence for

    engine development and production.

    More than 40 companies manufacture

    vehicles in the UK ranging from

    global volume car makers, van, truck

    and bus builders, to specialist niche

    players. The industry is supported by

    a dynamic supply chain including

    many of the worlds major Tier 1component manufacturers,

    technology providers, design and

    engineering consultancies; and it

    benefits from a world-renowned

    knowledge base.

    No other European country has

    anything like this range and number

    of automotive players. The industry in

    the UK is characterised by significant

    foreign direct investment and high

    exports, equivalent to 12.4% of theUKs exports of goods. Overall,

    automotive manufacturing provides

    221,000 jobs and contributes some

    9.8 billion value-added to the UK

    economy. The companies based in

    the UK operate in Europes second

    biggest automotive market with UK

    customers in 2005 accounting for the

    purchase of more than 2.4 million

    new cars equivalent to 17% of

    European vehicle registrations.

    Moreover, the UK offers a highly

    sophisticated retail and service/maintenance sector, which last year

    generated some 22 billion value

    added to the UK economy. It

    comprises some 65,000 businesses

    employing 550,000 people.

    Setting standards

    The automotive industry is at the

    forefront of process improvement

    setting standards for other sectors,

    such as aerospace and ischaracterised by economies of scale

    and low unit costs, despite the

    increasing complexity of its products.

    In 2005, 1.6 million cars equivalent to

    the peak number of fully assembled

    cars that rolled off the production

    lines in the early 1970s1 and just over

    200,000 commercial vehicles were

    produced in the UK. Of these, more

    than 73% of the cars and 62% of the

    commercial vehicles were exported.The UK accounts for some 3% of

    worldwide vehicle output and 9%

    of European assembly, ranking it

    fourth in Europe and ninth globally.

    This is in stark contrast to the

    industry of 40 years ago, when most

    cars sold in UK were designed and

    built in the UK, mainly for the home

    market. Now the majority of UK-

    made vehicles are exported to a wide

    variety of markets, with Europe the

    1 UK car production peaked in 1972 at 1.9 millions units, but this included a substantial number of kits for direct export.

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    Driving Force: Success and Sustainability in the UK Automotive Industry 5

    main destination, significant salesin North America and Asia, and

    specialist luxury marques sold

    around the globe.

    There are more than 2,600

    component manufacturers in the

    UK, contributing over 4.8 billion

    added value and employing around

    132,000 people. The UK is also an

    increasing force in powertrain design

    and production (the components

    making up the power transmissionsystem of a motor vehicle from

    engine to final drive), with a

    particular strength in engines.

    There is a long-established,

    independent, design engineering

    sector offering the full spectrum

    of services from concept design

    through to limited-series vehicle

    production. The sector is recognised

    internationally for its flexibility

    and responsiveness and for theinnovative qualities of its engineers.

    It continues to evolve and the

    last five years have witnessed a

    succession of acquisitions, closures

    and re-emergences in response

    to the changing demands of its

    global market.

    The UK is also strongly influential

    in vehicle styling, with many British

    designers and graduates from

    British institutions directly employedby vehicle manufacturers around

    the globe. As a direct result of this

    expertise, Nissan recently movedits design studio from Germany

    to London.

    Heritage and change

    This strong combination of heritage,

    diversity and agility places the

    automotive industry in the UK

    in excellent shape to face the

    unremitting pressures for change

    in the 21st Century. The principal

    challenge is for the UKs automotivemanufacturing industry to align its

    technology, product and business

    performance to deliver customer

    value in a global industry subject to

    relentless cost-cutting pressures.

    Regulation poses further challenges.

    Environmental protection and safety

    legislation are set to strongly

    influence the number and type of

    vehicles that will be manufactured,

    marketed and used. The focus withinEurope will be on securing these

    environmental benefits while

    generating competitive advantage.

    Additionally, industry analysts expect

    South East Asian manufacturers to

    dramatically increase their global

    market share. But with the UKs close

    focus on efficiency, productivity,

    innovation and value-added

    manufacturing and its cross-section

    of international manufacturers, theindustry is well placed to face these

    challenges with confidence.

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    Driving Force: Success and Sustainability in the UK Automotive Industry 7

    One of the great strengths of the

    UK automotive industry is a deep

    understanding of globalisation and

    an ability to continuously evolve and

    create new opportunities in the face

    of change. Over the last 20 years

    there has been a revolution in theway vehicles are manufactured,

    with a streamlining of production

    processes, elimination of waste and

    focus on quality, cost and delivery.

    It can be said that the automotive

    industry in the UK now rivals that

    in any country in the world for its

    combined efficiency, quality and

    unit cost.

    Foreign direct investment

    Overall, the sector includes some

    3,300 firms. The majority of vehicle

    manufacturers and first-tier

    component suppliers are overseas

    owned, all treated equally by the

    Government. Seven of these are

    volume car manufacturers with

    a number of truck, van and bus

    companies, supported by 19 of the

    worlds top 20 suppliers. The list

    includes, for example, BMW (MINI),

    Ford light commercial vehicles andengines (together with its Premier

    Automotive Group marques: Jaguar,

    Land Rover and Aston Martin), GM

    (Vauxhall), Honda, Nissan, Peugeot2

    and Toyota. Suppliers include Aisin,

    Bosch, Calsonic, Dana, Delphi,

    Denso, GKN, Johnson Matthey,

    Pilkington, Siemens VDO, TRW

    Conekt, Visteon and many more.

    In addition, there are a number of

    manufacturers producing high valueand luxury vehicles serving niche

    markets, including BMW (Rolls-

    Royce), Caterham, Connaught,

    Gibbs, McLaren and Mercedes-Benz

    (Mercedes-McLaren SLR), Morgan,

    Proton (Lotus), TVR, and

    VW (Bentley).

    There are also companies from

    the construction equipment, heavy

    plant and off-road sectors such as

    Caterpillar, CNH, JCB, Komatsu,

    McCormick and Terex, allmanufacturing in the UK.

    The UK has three sites producing

    light and medium vans. IBC Vehicles

    in Luton builds Vauxhall/Opel,

    Renault and Nissan badged vehicles,

    the Ford plant in Southampton

    manufactures Transit vans and LDV

    in Birmingham has recently

    introduced the new Maxus van.

    The UKs volume truck builder is

    Leyland Trucks, a wholly owned

    subsidiary of the PACCAR group of

    the US. The Leyland facility is one of

    Europes largest and most advanced

    plants. It builds trucks under the

    DAF and Foden brands. The plant

    has won many industry awards for

    its efficient performance.

    Overall the industry is currently

    investing over 1 billion annually in

    new plant and technology, equivalent

    to 10% of gross value-added.

    A global force

    The automotive industryin the UK now rivals that inany country in the worldfor its combined efficiency,quality and unit cost.

    2 Peugeot plant at Ryton scheduled to cease production in mid-2007

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    8 Driving Force: Success and Sustainability in the UK Automotive Industry

    A global force

    Highlights of the results of recent

    investments include:

    Toyotas Burnaston plant has seen

    output up 25% in two years;

    MINI output now exceeds 200,000

    units annually, in response to

    sustained strong demand;

    Exciting new models at Land

    Rover have lifted output by 20%

    to new record levels in 2005.Over 2,600 companies are active in

    the automotive components sector,

    ranging from the global players

    mentioned above to small and

    medium-sized businesses. Together

    they contribute over 4.8 billion

    added value and employ some

    132,000 people. The sector exports

    over 6 billion worth of goods

    annually, 75% destined for Europe

    and over 1 billion-worth travellingto the Americas.

    The UK is also a centre for design

    engineering where around 7,500

    people are employed, generating a

    turnover of some 650 million, with

    CASE STUDY

    Bentley gears up new flagship convertible

    Bentley

    The UK is also a centrefor design engineeringwhere around 7,500 peopleare employed.

    In 1998, Bentley Motors became part of the Volkswagen Group whichannounced a 500 million investment in the company. Bentley willsoon build the luxurious four-seater convertible Azure at its homefacility in Crewe, Cheshire. The latest new model joins the Bentleyline-up in Spring 2006 and becomes the flagship car of the range.

    A purpose built facility brings together the latest technology with

    unprecedented levels of craftsmanship for both the established Bentley

    Arnage and the new Azure. Bentley also produces its Continental GT

    and Continental Flying Spur cars on the same site.

    The facility combines traditional hand built skills with some robotics,

    but the vast majority of the 6400 spot welds on Arnage and the 6600 spotwelds on Azure are actually applied manually.

    The exceptions being the hemming operations of the doors, bonnet and

    boot areas.

    The new model is yet another in a series of new products conceived and

    built at the Bentley site in Crewe, Cheshire. Bentley Motors is this year

    celebrating 60 years of manufacturing at Crewe.

    Bentley has around 276 British suppliers and approximately 35 percent of

    these are located in the Midlands and North West areas. Its products are

    designed, engineered and produced on the self contained site, where a

    specialist team of over 500 engineers are dedicated to the brand development.

    In 2005, the company returned to profit with vehicle production exceeding

    8500 cars.

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    Driving Force: Success and Sustainability in the UK Automotive Industry 9

    October 2005 saw the two millionth car drive offthe production line at Toyotas Burnaston plantsince the start of operations in December 1992.

    From Burnaston, Toyota Motor Manufacturing (UK) Ltd

    exports Avensis and Corolla models to 80 markets

    worldwide with around 75% of production distributed

    to mainland Europe, 10% to Japan and 15% to the UK

    domestic market. In 2003 the Toyota Avensis,

    exclusively built in the UK, became the first European

    designed and built Toyota to be exported to the

    Japanese domestic market. Toyota was awarded the

    Queens Award for export in the category of

    International Trade in recognition of the companys

    outstanding contribution to British exports between

    20022004, with a net contribution to the UKs balance

    of payments typically more than 400 million per year.

    Toyota exports

    CASE STUDY

    Toyota

    around 65% exported. The UK is

    home to the dedicated facilities of

    vehicle manufacturers, such as those

    at Fords engineering centres at

    Dunton, Gaydon and Whitley, and

    Nissans R&D centre at Cranfield.

    In addition renowned names such

    as Lotus Engineering, MAHLE, MEL,

    Millbrook, MIRA, mi Technology,

    Perkins, Pi Technology, Prodrive,

    Ricardo, RLE, Roush, TRW Conekt,

    TWI and Zytek are also active in the

    UK. Many of these have other

    overseas operations, located

    everywhere from mainland Europe to

    the US, Japan and China.

    Motorsport

    In addition to the strength in

    mainstream vehicle design

    engineering, the UK is the global

    leader in motorsport and home to

    many frontrunners in Formula 1.

    The sector has an estimated annual

    turnover of 4.6 billion and directly

    employs 38,000 people, with UK

    firms commanding 80% of the

    global market.

    As brand values become ever more

    important, motorsport offers global

    manufacturers a unique platform

    to establish their reputation. Here,

    marques such as Subaru have

    capitalised on their world rallying

    success to increase road car sales in

    the UK, and the relationship betweenMcLaren and Mercedes-Benz led to

    the development of the Mercedes-

    McLaren SLR road car. There are also

    spin-off benefits to the mainstream

    automotive industry where

    companies such as Prodrive have

    moved from their roots in rallying to

    offer wider design engineering

    and development services whilst

    The UK is the global leader inmotorsport and home to manyfrontrunners in Formula 1.

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    10 Driving Force: Success and Sustainability in the UK Automotive Industry

    A global force

    Automotive 1999 2000 2001 2002 2003 2004

    Bentley 8

    BMW 70 154 124 146

    Cummins 45 47 43 50 55 44

    Ford Bridgend 531 485 493 576 594 621

    Ford Dagenham 520 670 670 615 620 682

    Honda 108 63 109 160 180 188

    Land Rover 200 200 210 220 250 47

    Nissan 275 316 301 256 281 272

    Powertrain 240 230 219 204 200 114

    Toyota 100 133 160 351 420 580

    Vauxhall 75 75 75 138 100 12

    Others 5 5 5 5 5 5

    Sub total 2099 2224 2355 2729 2829 2719

    Non-automotive

    Perkins 300 300 300 300 300 300

    Others 40 40 40 40 40 40

    Total 2439 2564 2695 3069 3169 3059

    Engine production in the UK(thousands of units/year):

    capitalising on the motorsport

    culture of team working and on

    time delivery to secure competitiveadvantage.

    Powertrain excellence

    The UK is a centre of excellence

    for powertrain development and

    manufacture, producing some three

    million automotive engines a year,

    with an estimated 3 billion in sales.

    A prime example is BMW Groups

    Hams Hall plant in Warwickshire,

    built to meet worldwide demand for

    the companys four-cylinder petrol

    engines, with 400 million invested

    to date. In 2002, its first full year of

    production, Hams Hall made 154,000

    engines for BMW 3-series and Z4

    cars. It also announced a decision to

    assemble a new-generation, four-

    cylinder petrol engine for future MINI

    and BMW 1-series variants, the result

    of BMWs collaboration with PSA

    Peugeot Citroen, and representing a

    combined investment of around 500

    million on R&D and manufacturing

    facilities over the period to 2007.

    The BMW decision involved the

    transfer of manufacturing from a

    relatively low labour cost location,

    The UK is a centre ofexcellence for powertraindevelopment andmanufacture, producingsome three millionautomotive engines a year.

    Totals may not add up due to rounding.

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    Driving Force: Success and Sustainability in the UK Automotive Industry 11

    Brazil, to the technology-rich

    environment of the UK.

    Ford too, sources a significant

    proportion of its engines in the UK

    some 25% of its global requirement

    and has expanded its facilities at

    Bridgend (petrol) and Dagenham

    (diesel) to meet this demand. The

    Dagenham site is now Fords global

    diesel engine centre of excellence.

    Meanwhile, in the off-road sector,

    JCB has recently invested more than

    80 million in the development and

    production of a new range of four-

    litre diesel engines at its dedicated

    plant in Derbyshire.

    The retail sector

    The UK offers a highly sophisticated

    retail and service/maintenance

    sector, employing more than 550,000

    people and generating added value

    of some 22 billion annually; and the

    past decade has seen a shift in added

    value from the manufacturing of

    vehicles to the retail end of the

    business chain.

    The sector is fiercely competitive

    across its range of services, from

    new vehicle sales through franchised

    and other retailers, to the trading of

    used vehicles, vehicle maintenance,

    servicing and repair, and sales ofspare parts.

    Consumers are increasingly buying

    on merit and demanding better

    quality and value. This behaviour

    enabled Korean brand Kia, which

    entered the UK market in 1991, to

    enjoy a 28% rise in sales for the first

    half of 2005, following a near 60%

    increase in 2004. Mazda is also

    selling well in the UK 48,000 cars

    were sold in 2004, representing an8% increase over the previous year.

    CASE STUDY The Ford Bridgend engine plant in Wales is on schedule to producea million units annually by 2010 and it will supply the latest petrolV8 engine for the new Jaguar XK Coupe.

    The plant has built up a strong relationship with Jaguar part of Fords

    Premier Automotive Group (PAG) of luxury brands over the last decade

    and delivered a world-beating V8 engine that has helped the brand move

    ahead of its rivals.The million power units annually will include the new 4.2-litre range in

    the latest XK series, together with PAGs existing 4.4-litre V8, a new

    in-line six cylinder engine, and Fords successful Duratec series of

    four-cylinder engines.

    The all-new XK is the most technically advanced Jaguar ever built with

    an advanced lightweight aluminium structure and is assembled in Castle

    Bromwich, West Midlands. The V8 develops 300bhp and is fitted with a

    Jaguar Sequential Shift six-speed automatic transmission incorporating

    steering wheel mounted paddles for manual gear changes.

    Ford Bridgend to produce a million engines a year

    Ford

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    12 Driving Force: Success and Sustainability in the UK Automotive Industry

    A global force

    The UK retail landscape has seen

    the emergence of a number of large

    quoted plcs, such as Pendragon and

    Inchape, who operate multi-marque

    networks and whose scale benefits

    both their balance sheets and

    customers alike. By contrast, the

    European retail network tends to rely

    more on brand loyalty and has a

    much higher concentration of small

    family-run dealerships.

    However, recent European policy

    and regulation developments have

    introduced greater competition in the

    EU. For example, recent changes to

    the Block Exemption Regulations

    mean that from October 2005,

    automotive retailers have been able

    to set up secondary sales outlets in

    other countries of the EU as well as

    their own. This may lead to retailer

    groups establishing operations

    across Europe. The big challenge

    for the UK retail sector is whether it

    can create strong UK-owned retail

    groups that can grow in Europe

    and elsewhere.

    Trade body

    The Retail Motor Industry Federation

    (RMIF), whose membership is made

    up of large, medium and small

    retail motor businesses includingfranchised car retailers, independent

    garages and bodyshops, represents

    the retail sector.

    The RMIFs role is to influence

    and play a major part in important

    motor trade issues affecting every

    individual in the sector, including

    European representation, such as

    on issues like the EC Block

    Exemption Regulation, and customer

    service standards.

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    Driving Force: Success and Sustainability in the UK Automotive Industry 13

    WORLD-CLASS

    PRODUCTIVITY

    CHAPTER 2

    Quality, cost and delivery (QCD) is the mantra of todays

    automotive engineers, and nowhere is this more important than in

    the UK, home to Europes most efficient car and truck plants.

    SMMT

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    14 Driving Force: Success and Sustainability in the UK Automotive Industry

    Overall value-added per employee

    as a measure of productivity has

    risen by 45% in just three years:

    a significant improvement.

    The UKs leading facility in terms of

    output is Nissan at Sunderland, with

    over 300,000 cars produced in 2004.

    This is also Europes most productive

    car plant, with Toyota at Burnaston

    and Honda in Swindon also in the

    European top 10 most productivecar factories.

    The year 2001 saw the arrival of the

    BMW MINI, now a major success

    around the world. When BMW

    started production, each worker was

    producing 36 cars a year; now it is 45.

    In 2004 Jaguars Halewood plant

    became Fords best performing plant

    in the world measured against a

    number of indicators in the Ford

    Production System. In 2005 Aston

    Martins production reached recordlevels on the back of the DB9 and

    new V8 Vantage models. The marque

    World-class productivity

    It has been 14 years since the first British-built Accord rolled off theassembly line at Honda of the UK Manufacturing Ltd (HUM),Swindon. Just 1200 Associates (as Honda calls its employees) built30,000 cars in the first full year of production.

    Two years later, the European Civic was introduced with production

    starting in September 1994. To manufacture two models on the same

    line was a major milestone in the plant's history - and these models

    have had a tremendous impact on Honda's fortunes in Europe.

    By 1995, the plant was building 91,200 cars a year, three-quarters of

    them Civics. Civic sales in Europe rose by 30%, while Honda increased

    its total car business in Britain by 50%.

    A further milestone was reached in 2000, when production of the CR-V

    was added to the Swindon line-up. Since then, a second production line

    has been added and the plant now employs 4,000 Associates building

    190,000 cars per year. Nearly 800,000 Civics have been built over the12-year period, with more than 60% exported to North America,

    Japan and mainland Europe. 326,000 Accords and 460,000 CR-Vs have

    also been built, the CR-Vs destined for the North American market as

    well as Europe.

    Here in Britain, the locally-built Civic is established as Honda's most

    popular car range, accounting for one in every three of the company's

    car sales. The model is also the most widely sold British-built compact in

    this country, with the Civic three-door the most popular car in its class.

    In October 2005 Honda reached another major milestone with the start

    of mass production of the 8th generation Civic, a five-door hatchback.Volume production began just seven months after the concept version

    was unveiled at the Geneva Motor Show.

    Honda success in Europe

    CASE STUDY

    Honda

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    Driving Force: Success and Sustainability in the UK Automotive Industry 15

    is well on its way to achieving Fords

    goal for annual sales.

    Leyland Trucks also saw record

    production in 2005 with its highestannual output from the Leyland plant

    in its 25-year history. Over 17,000

    Daf/Foden trucks where built in 2005,

    taking total production from the plant

    over the 25 years to the milestone

    figure of a quarter of a million.

    Quality, cost and delivery (QCD), or

    lean manufacturing, is an approach

    that is constantly searching for better

    ways of doing things and looking

    at how to eliminate waste. It hasbeen the driving force behind

    development of the UK automotive

    industry in recent years.

    SMMT Industry Forum

    The impetus to achieve improved

    QCD came with the arrival of Honda,

    Nissan and Toyota in the mid-1980sand early 1990s. They spearheaded a

    drive for efficient production and

    for process improvement that lifted

    quality across the sector to world-

    beating levels. This was the origin

    of the SMMT (Society of Motor

    Manufacturers and Traders) Industry

    Forum which brought together a

    unique collaboration between

    international vehicle manufacturers,

    including Honda, Nissan and Toyota,

    as well as GM (Vauxhall) and

    Volkswagen. DTI was a strategic

    partner in the process and in 1996

    helped turn the concept into a reality

    CASE STUDY In summer 2005 Jaguars Halewood plant in Merseyside waspresented with the prestigious JD Power and Associates EuropeanPlant Quality Gold Award.

    And for three consecutive years, the plant has received the top score in

    Fords Integrated Systems Review. This annual process audit measures

    manufacturing and quality standards in all Ford-owned facilities. This is

    an influential internal review and Halewood is now seen as a globalbenchmark for best practice.

    The Jaguar facility scooped the JD Power accolade after its product, the

    X-TYPE, led Jaguar to a remarkable success in JD Powers annual survey

    of US customer satisfaction. It improved to second position overall in the

    survey and became the highest-ranked European nameplate.

    The X-TYPE is Jaguars most improved model. The Merseyside

    manufactured car improved 37 points in the JD Power study, a 35% leap

    over the year before. The study ranks new vehicle quality after 90 days in

    the hands of customers and is recognised as the industrys top

    benchmark for quality.

    The Halewood plant is also home to the Premier Automotive Groups

    European Lean Learning Academy and acts as a centre of excellence for

    Premier Automotive Group employees. Managers from across Europe

    spend three weeks at the centre sharing best practice and learning about

    the principles and techniques associated with lean manufacturing.

    Jaguar in Britain

    Jaguar

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    16 Driving Force: Success and Sustainability in the UK Automotive Industry

    World-class productivity

    with an initial grant of almost

    4 million when Industry Forum

    opened for business.

    With the shared goal of raising

    manufacturing standards to world-

    class across the whole industry, the

    founding companies of Industry

    Forum each supplied master

    engineers to transfer the skills,

    knowledge, tools and delivery

    techniques of process improvement

    across the sector and down the

    supply chain. This led to the

    development of a suite of learning

    by doing programmes, and while

    the master engineers have since

    returned to their respective

    companies, the training is now

    delivered by senior Industry

    Forum Engineers who maintain the

    high standards.

    CASE STUDY The outstanding sales success of the MINI has prompted the BMWGroup to invest over 100 million in its Oxford plant between nowand 2007, creating around 200 new jobs in MINI production.

    The BMW Group has already invested 280 million in the production of MINI

    in Oxford since 2000. Around half of the 100 million announced last

    year is being invested into a new body shell production extension in order

    to increase capacity and reduce customer waiting times.The MINI is on sale in more than 70 different countries, from Chile to China,

    and worldwide sales since launch reached a total of 529,921 vehicles at the

    end of 2004. The UK remains the largest market, followed by the US and

    Germany with more than 75% of MINIs being exported from the Oxford plant.

    MINI production, originally planned for around 100,000 vehicles per year,

    now exceeds 200,000 units annually in response to sustained strong demand,

    making the Oxford plant the fourth largest vehicle producer in the UK. The total

    number of employees has risen to 4,500, including around 125 apprentices.

    Growth has been based on continuous efficiency improvements in

    production processes including ideas from the plants employees whichhave led to savings of 17.2 million since 2002. With one of the most flexible

    working time models in the UK automotive industry, the current three-shift

    working pattern enables the plant, in response to customer demand, to run

    seven days and up to 134 hours per week, using the remaining time for

    maintenance and cleaning.

    From 2007, more than 80 people and 160 computer-controlled welding

    robots will be assembling MINI body shells in a new building. The paint

    shop will be equipped with new, highly efficient and flexible paint

    technologies to improve both capacity and flexibility.

    The MINI production triangle in the UK incorporates plants Oxford, Hams

    Hall (petrol engines) and Swindon (pressed parts). This localised networkdelivers increased economic impact, enhanced technical competence

    and flexibility.

    MINI scores major success

    Mini

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    Driving Force: Success and Sustainability in the UK Automotive Industry 17

    Clarity

    The measures highlight priorities for improvement in production

    management with clarity and focus.

    Simplicity

    They simplify even a complex manufacturing process and identify a

    straightforward route to gain performance improvements.

    Feedback

    The measures can be used to quantify the results of any changes to the

    process. The effect of a change can be compared with the status of the

    process before the change. QCD provides rapid feedback and quantifiable

    numeric comparisons.

    Benchmarking

    QCD provides the basis for objective comparison with benchmarked

    processes or the performance of a benchmark company. This highlights

    processes which offer better methods and practices.

    The bottom line

    Business survival is dependent on the profit generated from satisfying

    customers. QCD is a robust production tool which has a measurable

    effect on manufacturing efficiency, and can help to improve

    competitiveness, develop business and increase profit.

    Since 1996, the Industry Forum has

    worked with over 450 car and

    components manufacturers to

    improve their performance and

    the model has been used for around

    14 other industry sectors, including

    construction equipment, semi-

    conductors, electronics, aerospace,

    telecommunications, textiles,

    building products, food and

    chemicals processing.

    A study by SMMT Industry Forum

    identified average benefits of

    150,000 per annum per company

    taking a MasterClass, giving a

    payback time of just over a month

    after the improvements had been

    implemented. Overall, the benefits

    being enjoyed by British

    manufacturing industry since

    Industry Forum was formed is

    estimated at close to 118 million.

    This work provides the basis for new

    initiatives such as the Automotive

    Academy and Supply Chain Groups

    which are looking to embed lean

    manufacturing skills and processesmore broadly and deeply across the

    whole automotive manufacturing

    sector (see page 20).

    Measuring QCD provides significant advantages

    Ford

    Since 1996, Industry Forumhas worked with over 450car and components

    manufacturers to improvetheir performance.

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    18 Driving Force: Success and Sustainability in the UK Automotive Industry

    GOVERNMENT

    AND INDUSTRYIN PARTNERSHIP

    CHAPTER 3

    The value the UK Government places on manufacturing and the

    automotive industry in particular is demonstrated by the

    quality, frequency and intensity of dialogue and collaboration.

    Ford

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    Driving Force: Success and Sustainability in the UK Automotive Industry 19

    The regulatory and policy agenda

    impacting on the automotive sector

    is a challenging one in particular,

    environmental imperatives and the

    need for continuous improvement

    in safety standards will continue to

    be major drivers of the market. The

    Government fully appreciates the

    need for regular, high level contact

    with the sector and the development

    of a partnership approach to ensure

    policy-making on these and other

    areas is effectively joined up and

    properly informed by the potential

    implications for competitiveness.

    The UK seeks to minimise threats

    and maximise opportunities,

    pursuing the partnership approach

    through bodies such as the Vehicle

    Industry Policy and European

    Regulation Group (VIPER), the Retail

    Motor Strategy Group (RMSG) and

    the Low Carbon Vehicle Partnership

    (LowCVP).

    VIPER

    VIPER was established in 2003 by

    the DTIs Automotive Unit to provide

    a one stop policy shop for the

    automotive sector. Representatives

    of a cross-section of the industry

    (including all the major vehicle

    manufacturers) are brought together

    on a regular basis with officials from

    across Government, including not

    just DTI, but also the Department for

    Environment, Food and Rural Affairs,

    and the Department for Transport.

    VIPER monitors the policy

    formulation process in the UK and

    Europe, scanning the horizon to

    ensure industry is engaged in all

    relevant aspects of policy

    development from an early stage and

    facilitating detailed discussion on key

    subjects at all stages of the policy

    formulation and implementation

    process. In everything it does, VIPER

    helps to reinforce the Governments

    commitment to the principles

    of Better Regulation and the

    emphasis at all points is on

    maximum transparency.

    Since its inception, VIPER has helped

    to frame UK policy on a wider variety

    of issues, from the implementation

    of the End of Life Vehicles Directive

    to the European Commissions latest

    Euro V proposals on air quality (it is

    estimated that the cost to business

    of implementing the End of Life

    Vehicles Directive, for example, has

    been cut by 250 million). In 2005,

    it also enabled the UK Government

    to engage with the automotive

    sector on a regular basis throughout

    the lifetime of the European

    Commissions CARS21 group3.

    The success of the VIPER model has

    led DTI to replicate it in a number ofother industrial sectors.

    Retail Motor Strategy Group

    The Retail Motor Strategy Group

    (RMSG) was created in 2002 to

    provide a strategic interface between

    the Government and industry on the

    particular policy framework impacting

    the automotive retail sector.

    Government and industry in partnership

    Representatives of a cross-section of the industry(including all the majorvehicle manufacturers)are brought together on aregular basis.

    SMMT

    3 CARS21 was a high level group brought together by the European Commission to consider the future of the

    European automotive sector and, in particular, how enhanced competitiveness could be delivered

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    20 Driving Force: Success and Sustainability in the UK Automotive Industry

    Membership of the Retail Motor

    Strategy Group (RMSG) is drawnfrom senior management and Chief

    Executives, from Government,

    manufacturers, franchised and

    independent retailers, parts suppliers

    and consumer representative bodies.

    Like VIPER, the RMSG enables

    members to access the government

    officials responsible for developing

    and implementing policy and

    regulation at both a UK and

    European level, shaping their

    thinking at the earliest opportunity.

    Priority areas of work include theEC Block Exemption Regulation

    defining the competition law

    Government and industry in partnership

    The AIGT made a number of recommendations the following year.

    These included the establishment of three organisations:

    An Automotive Academy to raise skill standards throughout the

    industry (see page 23);

    The Low Carbon Vehicle Partnership to accelerate the move to a low

    carbon future through joint stakeholder activity (see page 21);

    Centres of Excellence (CoE) in two priority areas sustainable

    transport and low carbon propulsion (see page 27).

    The AIGT made a number of additional recommendations aimed at

    improving other aspects of the sectors, including: Placing the Foresight Vehicle network under industry ownership to

    improve its responsiveness to industry needs (see page 27);

    The development of a Supply Chain Group programme to increase

    efficiency of the supply chain through the promotion of best practice.

    The Supply Chain Group (SCG) programme was launched in April 2003

    to run for five years with up to 15 million of government funding. It aims

    to strengthen the productivity and competitiveness of assisted businesses

    through the adoption of world-class processes and techniques.

    Companies can apply for a grant that may cover up to 50% of the cost of

    a project. Already 27 SCG projects are under way covering automotivecompanies that employ over 50,000 people and generate over 2.5 billion

    of added value, representing a significant part of the sector.

    In 2001 the DTIs Automotive Unit established an Automotive Innovationand Growth Team (AIGT) under the chairmanship of Sir Ian Gibson,bringing together the expertise of Government, industry and academiato analyse the industry and set out actions for all parties.

    Shaping the future

    The RMSG enablesmembers to access thegovernment officialsresponsible for developingand implementing policyand regulation at both aUK and European level.

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    Driving Force: Success and Sustainability in the UK Automotive Industry 21

    framework for the sector across the

    EU and the desire to increase

    customer confidence in service

    standards throughout the industry.

    Low Carbon Vehicle Partnership

    LowCVP is an action and advisory

    group established in January 2003 to

    take the lead in accelerating the shift

    to clean, low carbon vehicles and

    fuels in the UK. It is a partnership of

    organisations from the automotive

    and fuel industries, academia,

    environmental non-governmental

    organisations and other stakeholderswho are working together with

    Government on shared goals to

    make the shift happen. The

    objectives are set out in the

    Governments Powering Future

    Vehicles Strategy which defines low

    carbon targets for 10% of new car

    sales and 20% of new buses in the

    UK by 2012 in support of the UKs

    commitment to the Kyoto Protocol.

    LowCVP has been recognised

    internationally as a best practice

    government and industry

    partnership. An early outcome was

    the development of the new Energy

    Efficiency Car Label, ahead of the

    rest of Europe, which is helping

    transform the market by persuading

    consumers to buy greener cars.Another outcome is a programme

    initiated by DTI/DEFRA to use public

    procurement as a mechanism to

    accelerate the introduction of low

    carbon vehicles into the market in

    volumes large enough to make their

    manufacture a viable proposition for

    the future. This is being taken

    forward by Cenex and is described in

    further detail on page 27.

    LowCVP has beenrecognised internationally as

    a best practice governmentand industry partnership.

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    22 Driving Force: Success and Sustainability in the UK Automotive Industry

    PEOPLE

    AND SKILLS

    CHAPTER 4

    Skills are of fundamental importance to the economic

    prosperity of the UK. Against a backdrop of globalisation,

    rapid technological change and an ageing population,

    knowledge and skills are playing an increasingly important

    role in the UKs capacity for innovation and growth.

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    Driving Force: Success and Sustainability in the UK Automotive Industry 23

    In recognition of this link between

    productivity and skills, one of the key

    recommendations of the Automotive

    Innovation and Growth Team (see

    Shaping the future page 20) was

    for the creation of an Automotive

    Academy to ensure the skills levels

    of the UK automotive workforce are

    raised to the highest possible global

    standards. The brief was for an

    Academy that would be industry-

    driven and deliver training that was

    world-class, demand-led, consistent

    throughout the country and

    nationally and internationally

    recognised.

    Established by the SMMT in 2004 as

    a partnership between Government

    and industry and with over

    13 million backing from the DTI,

    the Automotive Academy now

    operates across the industry, offering

    training from the shop floor through

    to senior boardroom directors, with

    lean production and business

    improvement at its core.

    The Academys vision is to be the

    prestigious national centre of

    learning for people in the automotive

    industry in the UK. The Academy

    does not itself deliver courses, rather

    it provides easy access for firms and

    individuals in Britain to training that

    is globally competitive and directly

    relevant to the industry.

    The Academy is working with

    stakeholders from the education

    sector including the Sector Skills

    Council (SEMTA), the qualification

    awarding bodies, the Learning and

    Skills Council and training providers

    to establish a core curriculum of

    training programmes and material.

    Courses are subject to a stringent

    validation process and materials,

    trainers and assessors across the

    UK are benchmarked against best

    practice. Those successfully

    completing the courses gain a

    nationally recognised Certificate of

    Achievement. Employees come from

    all disciplines engineers, supplyand purchasing staff, shop floor

    operators, team leaders, managers

    and executives and from across

    the industry, from the smaller

    manufacturers in the component

    supply chain up to the UKs biggest

    vehicle manufacturers.

    The Academy has also created a

    skills escalator to promote

    continuous learning, encouraging

    greater focus on career developmentwith the aim of retaining skilled staff

    and delivering sustainable business

    improvements.

    The hub of the Academy is based

    in the heart of the UK automotive

    industry in the West Midlands and

    is responsible for the skills strategy

    as well as marketing and public

    relations. In addition, it carries out

    validation of the courses, training

    providers and assessors. The hub issupported by a network of regional

    spokes working to identify and

    satisfy local demand. The spokes act

    as agents for the Academy, providing

    a one-stop shop contact point to

    help companies with their training

    and funding requirements. There will

    be nine spokes, each providing an

    essential regional focus and offering

    support locally, with a remit to

    improve the skills base in the

    automotive industry in their local

    area, serving everyone from small

    companies in the supply chain to

    the major manufacturers.

    People and skills

    The Academy has alsocreated a skills escalator topromote continuous learning,encouraging greater focus oncareer development.

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    24 Driving Force: Success and Sustainability in the UK Automotive Industry

    People and skills

    It does this by working with employers and partners in the motor

    industry across the UK to develop a highly skilled and motivated

    workforce. Its purpose is to:

    Reduce skills gaps and shortages;

    Improve productivity, business and public service performance;

    Increase opportunities for the development of the workforce across

    the whole sector;

    Influence action which improves the quality and quantity of

    learning supply.

    *Automotive Skills Limited is part of a network of Sector Skills Councils which brings

    together employers, trade unions and professional bodies working with Government

    to develop the skills that UK business needs. SEMTA is the corresponding Sector

    Skills Council for automotive manufacturing.

    Improving skills in the retail sector

    CASE STUDY Automotive Skills Limited is the Sector Skills Council*for the retailmotor trade, charged by Government and employers with leadingthe drive to raise the skills base in the UK automotive industry.

    Automotive Skills

    Nissan design studio in London

    CASE STUDY Nissan has recently opened a new colour studio inside its Europeandesign headquarters in central London.

    The facility, which covers 240 square metres, is situated in the south

    wing of the Rotunda, a converted British Rail maintenance workshop,

    which has been home to Nissan Design Europe (NDE) since January2003. Seven full-time designers will be based there, working on both

    exploratory and production vehicles.

    The colour designers come from a variety of cultural and professional

    backgrounds, their common strength being an ability to develop an

    atmosphere or identity through the balanced use of colour, materials

    and detailing.

    NDE employs around 50 full-time staff, all of which are based in the

    Paddington studio. It plays a key role in Nissans global design network,

    which comprises six studios worldwide. Nissan

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    Driving Force: Success and Sustainability in the UK Automotive Industry 25

    CUTTING EDGE

    RESEARCH

    AND DEVELOPMENTThe creativity and inventiveness of our people is

    the UKs greatest asset and our ability to invent,

    design and manufacture the goods and services

    that people want is vital to our future prosperity.

    CHAPTER 5

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    26 Driving Force: Success and Sustainability in the UK Automotive Industry

    With increasing globalisation, the

    capability to exploit new ideas is

    essential to safeguard and deliver

    high quality jobs and successful

    businesses.

    The UK is well placed to succeed.

    In 2003, the UK produced about 12%

    of global citations across nine major

    research fields including Engineering,

    Physical Sciences, Environmental

    Sciences, Mathematics and Business,

    and overall is ranked second

    only behind the United States.

    Unsurprisingly against this

    background, technological innovation

    plays a major role in the success of

    the UK as a centre for world-class

    automotive research and

    development.

    Design engineering teams across

    the industry are dedicated to cutting-

    edge innovation (see Chapter 1).

    Small, specialist vehicle

    manufacturers, such as Morgan,

    Connaught and Zytek are also

    significant in that they are agileenough to provide a faster route

    to market than the high volume

    manufacturers. They are also less

    constrained in their choice of

    technology partners.

    Similarly, the UKs commercial

    vehicle sector, including bus and

    truck, is particularly important as an

    entry point for environmentally

    friendly vehicle technologies in fleet

    Cutting edge research and development

    CASE STUDY

    The Dagenham Diesel Centre is the focus of Fords diesel engine

    development and production and is a state-of-the-art facility, creatingand building premium high technology diesel engines for Ford, Jaguar,

    Land Rover and PSA Peugeot Citron customers.

    Ford has invested 550 million in diesel engine and manufacturing at

    Dagenham since 2003 and it is expected that around 50% of all cars

    sold in Europe by 2006 will be diesel-powered.

    CEME was established with some 37 million funding from a unique

    private/public partnership led by Ford and the London Development

    Agency, together with Barking and Havering Further Education Colleges

    and London Riverside Limited. It offers a world-leading learning

    environment specifically aimed at encouraging a diverse, socially

    inclusive and innovative range of learning activities to build engineering,manufacturing and business capabilities.

    Fords Dagenham Diesel Centre and the Centre forEngineering and Manufacturing Excellence

    Ford

    Design engineering teamsacross the industry arededicated to cutting-edgeinnovation.

    Officially opened by the UK Prime Minister in 2003, Ford's DagenhamDiesel Centre (DDC) in Essex is an advanced production andengineering facility while the nearby Centre for Engineeering andManufacturing Excellence (CEME) is an outstanding establishmentfor education and learning.

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    applications. This also introduces

    new technology elements into the

    supply chain.

    This technological capability reflects

    the current strengths and structure of

    the sector. For example, the UK has

    world-class capability in powertrain

    systems integration, an area that is

    becoming ever more important as

    the electronic and mechanical

    systems become more complex andthe demands on reliability more

    stringent.

    Foresight Vehicle Programme

    The sharing of this expertise,

    through knowledge transfer, is

    crucial to the industry as a whole.

    Here, industry, academia and the

    Government have come together to

    create Foresight Vehicle, the UKs

    prime knowledge transfer networkfor automotive applications, seeking

    to identify critical technologies for

    sustainable road transport.

    In addition to networking, Foresight

    Vehicle products include over 100

    collaborative R&D projects worth

    more than 100 million, involving

    industry working with the research

    base, transferring technology and

    solving problems. These projects

    cover the key technology themes of:

    Engine and powertrain;

    Hybrid, electric and alternatively

    fuelled vehicles;

    Advanced software, sensors,

    electronics and telematics;

    Advanced structures and

    materials;

    Design and manufacturing

    processes.

    The Foresight Vehicle Technology

    Roadmap provides technology and

    research directions for future road

    vehicles and has been developed in

    a global context to help support UK

    industry to provide sustainablemobility for UK citizens. It is available

    through the SMMT Foresight Vehicle

    website.

    Centres of Excellence

    The Technology Roadmap validates

    the recommendations of the

    Automotive Innovation and Growth

    Team (AIGT) for action in the key

    technology areas of telematics and

    low carbon propulsion technologies.As a result, two new cross-sectoral

    Centres of Excellence have been

    established to move these

    technologies closer to the market.

    Cenex the Low Carbon and Fuel

    Cells Centre of Excellence was

    established in April 2005. Jointly

    funded by industry and the DTI,

    the Centre is helping to build a

    competitive advantage for the

    automotive industries in the UKthrough the shift to a low carbon

    economy. Its activities will assist UK

    companies developing low carbon

    automotive technologies to bring

    these to market, and showcase the

    UKs expertise to encourage inward

    investment. Cenex is also operating,

    on behalf of the DTI, the UKs

    Knowledge Transfer Network in low

    carbon and fuel cells technologies.

    Foresight Vehicle productsinclude over 100 collaborativeR&D projects worth morethan 100 million.

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    28 Driving Force: Success and Sustainability in the UK Automotive Industry

    Cenex is focusing upon:

    Mapping current and emerging

    technologies in the low carbon

    and fuel cell markets and

    identifying and communicating

    those which may influence the

    future direction of the industry;

    Influencing the creation and

    deployment of fleet-scale

    demonstrators in the UK

    passenger vehicle, public transport

    and commercial vehicle sectors;

    Facilitating affordable market

    entry strategies for low carbon

    and fuel cell technologies by

    direct intervention with public

    and private sector procurement

    bodies;

    Becoming a flagship organisation

    for the promotion of UK activities

    on low carbon and fuel celltechnologies and acting as the

    focus for projects requiring

    international co-operation;

    Mobilising or otherwise

    constructing an effective UK

    supply chain by coordinating the

    activities of academia, component

    suppliers, assemblers, OEMs and

    other intermediaries.

    Public procurement is expected to

    play a key role in transforming theroad vehicle market in the UK.

    Low carbon urban delivery vehicles

    have been selected as one of the

    public procurement exemplars being

    progressed under the Environmental

    Innovations Advisory Groups (a joint

    DTI/DEFRA unit) Forward

    Commitment Project to encourage

    the development of the market for

    environmental technologies. Cenex is

    leading this project.

    innovITS is the Centre of Excellencefor telematics and technologies for

    sustainable mobility, also established

    in April 2005. Its vision is to co-

    ordinate the UKs validation of new

    and innovative Intelligent Transport

    Systems (ITS) as a catalyst to

    building world-class products and

    services that enable the UK ITS

    industry to compete globally. Its

    coverage, from either a service

    provider or road user perspective,

    includes both:

    The management of vehicles

    using the road system to improve

    the journey time, reliability and

    safety for those vehicles and to

    improve road network efficiency;

    Systems to improve safety,

    comfort and journey time

    reliability for users of vehicles.

    Cutting edge research and development

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    Driving Force: Success and Sustainability in the UK Automotive Industry 29

    Work is focusing around five project

    themes which will evolve over time:

    A commercial vehicle platform

    a unified on-board platform for

    commercial vehicles to enable

    a wide range of current and

    emerging telematics applications;

    Infrastructure integration

    information services and roadside

    equipment for delivering a range

    of current and emerging ITS

    applications from a common base;

    Smart traveller services dynamic

    travel information services for

    multimodal operations with

    integration between vehicle-

    oriented and other journey stages;

    Extended fleet management

    advanced monitoring and

    management applications for

    commercial fleets and freight;

    Integrated communications

    solution a medium-independent

    on-board platform for vehicle-to-

    vehicle and vehicle-to-

    infrastructure communications.

    Three years after the go-ahead, the first JCB 444 diesel engine was

    produced at the Dove Valley plant in Derbyshire on 1 November 2004.

    The new plant has now produced more than 10,000 engines and output

    will reach 25,000 in 2006.

    To start with a clean sheet of paper required an investment of 80 million

    in research and development and the advanced assembly plant. JCB

    already designs and produces in-house: transmissions, axles and cabs.

    Working with world-class technology partners, the new engine was

    designed to achieve excellent low-speed torque, class-leading low noiselevels and the latest combustion technology able to cope with the ever

    more stringent emissions regulations. The basis of the design is a very

    strong, rigid construction with a bedplate at the base of the engine to

    improve stiffness and so improve durability and lower noise levels.

    The result is the most modern engine designed specifically for the

    construction equipment industry and acclaimed by operators for its low

    noise and excellent performance. Manufacturers from sectors as diverse

    as marine and generators are keen to use the JCB 444 engine in their

    equipment and third party sales are already well under way.

    JCBs bold investment in its own diesel engine

    CASE STUDY Deciding to build your own diesel engine, instead of buying fromestablished engine producers, is not a decision to be taken lightly.

    But this was the brave step JCB took in order to have a state-of-the-art diesel engine designed specifically for off-highway use.

    JCB

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    30 Driving Force: Success and Sustainability in the UK Automotive Industry

    Cutting edge research and development

    A DTI-commissioned report indicated that for the UK the use of hydrogen

    as a transport fuel offers significant opportunities for cost-competitive CO2

    reduction by 2030.Hydrogen energy could provide competitive CO2 reductions for the UK in

    six types of road transport energy chains using fuel cell vehicles. These

    chains also offer improved energy security. The chains are defined by their

    primary energy source: renewable electricity, nuclear electricity, natural gas

    with carbon capture and storage (CCS), coal with CCS, biomass with

    optional CCS and novel hydrogen production technologies. None of these

    energy chains are readily available today and all require significant changes

    to the energy system. However, they are sufficiently promising to be worth

    pursuing as options for the UK.

    The Government has also announced a 15 million fund over four years

    for the demonstration of hydrogen and fuel cell projects. This is in additionto continuing support for hydrogen and fuel cell R&D. Currently around

    4 million a year is dedicated to hydrogen R&D across the public sector.

    Of this, some 2.5 million is funded by the Engineering and Physical

    Sciences Research Council (EPSRC), including the Sustainable Hydrogen

    Energy Consortium funded under the EPSRCs Supergen programme.

    Additional funding for applied R&D will come from the Collaborative

    R&D product under the DTI Technology Programme where 20 million

    per annum is earmarked for industry-led research into clean energy

    technologies.

    The UK Government has welcomed the development of a StrategicFramework for Hydrogen Energy in the UK and is committed toestablishing a Hydrogen Co-ordination Unit that will provide animportant focus and catalyst for hydrogen energy activity in the UK.

    Hydrogen and fuel cells

    Ford

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    Driving Force: Success and Sustainability in the UK Automotive Industry 31

    LOOKING

    FORWARDThe future is led by demand demand for sustainable

    mobility, delivering cleaner, more fuel-efficient vehicles

    to a sophisticated audience, produced by an efficient and

    productive industry competing on a global stage.

    CHAPTER 6

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    32 Driving Force: Success and Sustainability in the UK Automotive Industry

    We want the volume vehicle

    manufacturers to continue to invest

    here as part of the UKs rich tapestry

    of automotive design, engineering

    and manufacturing excellence. We

    will attract them through a skilled

    workforce, dynamic supply chains,

    creative ideas, and innovative

    products and processes, helping

    them to develop their brands and

    differentiate their products in the

    marketplace.

    The Government is doing everything

    it can to create the right business

    and regulatory background for the

    UK automotive industry to succeed

    and to deliver a future deeply rooted

    in high added-value manufacturing

    and services.

    We play to our strengths. The UK

    represents 1% of the world

    population but it accounts for 5%

    of the worlds science. The UK has

    the world-beating design and

    engineering skills to help OEMs

    achieve their goals. The UK is already

    a world centre for design and

    manufacturing excellence inpowertrain. We need to remain at

    the forefront of this industry as new

    propulsion technologies emerge.

    But far from looking inwards, were

    also looking at whats happening in

    the US and in Japan, where there

    are, for example, real-world trials of

    fuel cell cars. We know that we

    need to have supply chains capable

    of working with these leaders in

    the future.

    Looking forward

    The UK represents 1% ofthe world population butit accounts for 5% of theworlds science.

    CASE STUDY The Gibbs Aquada amphibious car exemplifies the diversity of theUK automotive industry.

    The vehicle is the result of seven years work by 70 engineers and

    designers at the companys headquarters in the Midlands where the

    firm was established by New Zealand entrepreneur Alan Gibbs andBriton Neil Jenkins in 1999.

    Their aim was to build a production sports amphibian that was fully

    compliant with marine and road regulations. It was decided to build the

    vehicle in the UK, the home of niche, low volume car manufacture and

    Formula 1 engineering.

    The engine, placed in a mid/rear position, directly behind the cockpit, is

    the lightweight alloy K-series, 175bhp, 2.5-litre V-6 from Powertrain.

    On land, this is capable of pushing the vehicle up to 100mph.

    On water the same engine drives a jet that expels water at high pressure

    to propel the boat like a jet ski, allowing the vehicle to plane across thewater at more than 30 mph. The jet unit is less than one metre long and

    weighs just under 40 kg possibly the smallest in existence for its power.

    Gibbs Aquada

    Gibbs

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    Driving Force: Success and Sustainability in the UK Automotive Industry 33

    We are keeping our technological

    options open, looking at pathways to

    low carbon emissions, advanced

    gasoline and diesel, more efficient

    transmissions, hybrid and fuel cell

    technologies, biofuels and hydrogen,

    and also making sure that we have a

    market here for the next generation

    of environmentally-designed cars, to

    encourage their manufacturers to

    locate in the UK.

    We are looking beyond the car,

    recognising that the modern road

    vehicle is a key component of an

    integrated transport system.

    Transport that works for everyone is

    a key priority for the Government.

    Intelligent Transport Systems form an

    important part of the UKs delivery

    plans for future transport, helping

    road users to travel more safely on

    less congested roads. The

    Governments ITS policy framework

    for the roads sector describes the

    UKs drive for a joined-up approach

    to make the best use of ITS.

    The skills base for the car of the

    future is just as important as the

    technology that will be used to build

    it. We are producing world-class

    engineers, from traditional

    mechanical, to electronic engineers,

    recognising that some 40% of the

    value of the car is now embedded in

    electrical and electronic systems. We

    are providing the right environment

    for a new generation of chemical

    engineers to work on future fuel cell

    systems. We are investing massively

    in our workforce through the

    Automotive Academy in workers

    on the shop floor, supervisors and

    engineers, and most importantly, in

    the leaders of tomorrow.

    We are applying our world-

    renowned ideas and know-how to

    provide solutions.

    The automotive industry is crucial to

    the UKs future as a high technology,

    high wage, knowledge-driven

    economy and it is crucial to the UKs

    economic success and prosperity.

    This brochure describes how the UK

    is planning a future which delivers

    sustainable mobility; a future that isgood for the motorist, good for the

    environment and good for industry.

    Connaught Motor

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    Driving Force: Success and Sustainability in the UK Automotive Industry 35

    Major Powertrain Production Locations

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    36 Driving Force: Success and Sustainability in the UK Automotive Industry

    APPENDIX

    Leading Car Production Locations

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    Driving Force: Success and Sustainability in the UK Automotive Industry 37

    Key Universities for the Automotive Sector

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    38 Driving Force: Success and Sustainability in the UK Automotive Industry

    APPENDIX

    Web links to major contributors to this brochure

    http://unitedkingdom.cat.com/

    http://www.aisin-europe.com/

    http://www.aquada.co.uk/

    http://www.astonmartin.co.uk/

    http://www.automotiveacademy.co.uk/

    http://www.bentleymotors.com/bentleymotors/

    http://www.boschautoparts.co.uk/

    http://www.caterham.co.uk/

    http://www.cenex.co.uk/

    http://www.ckeurope.com/

    http://www.cnh.com/home.asp

    http://www.conekt.net/

    http://www.connaughtmotorco.com/

    http://www.cosworth-technology.co.uk/

    http://www.delphidieselsystems.com/uk/

    http://www.denso-id.co.uk/

    http://www.dft.gov.uk/stellent/groups/dft_roads/documents/divisionhomepage/030684.hcsp

    http://www.dti.gov.uk/sectors_automotive.html

    http://www.epsrc.ac.uk/

    http://www.ford.co.uk/

    http://www.foresightvehicle.org.uk/

    http://www.gkn.com/

    http://www.goskills.org/

    http://www.grouplotus.com/

    http://www.honda.co.uk/http://www.industryforum.co.uk/

    http://www.innovits.com/

    http://www.its-uk.org.uk/

    http://www.jaguar.co.uk/

    http://www.jcb.com/

    http://www.komatsu.co.uk/

    http://www.landrover.com/

    http://www.ldv.co.uk/

    http://www.leyland-trucks.co.uk/

    http://www.lowcvp.org.uk/

    http://www.matthey.com/index.htm

    http://www.mccormick-intl.com/uk/

    http://www.mclarencars.com/

    http://www.melglobal.com/transport_solutions/

    http://www.millbrook.co.uk/

    http://www.mini.co.uk/

    http://www.mira.co.uk/

    http://www.mi-technology.com/

    http://www.morgan-motor.co.uk/

    http://www.nissan.co.uk/

    http://www.perkins.com/

    http://www.peugeot.co.uk/

    http://www.pilkington.com/europe/uk+and+irel

    and/english/default.htm

    http://www.pitechnology.com/

    http://www.prodrive.com/Intromovie.htm

    http://www.ricardo.com/default.aspxhttp://www.rle-international.co.uk/

    http://www.rmif.co.uk

    http://www.rolls-roycemotorcars.com/

    http://www.roush.co.uk/

    http://www.siemensvdo.co.uk/

    http://www.smmt.co.uk/

    http://www.supplychaingroups.co.uk/

    http://www.terexcompactequipment.com/

    http://www.toyota.co.uk/http://www.tvr-eng.co.uk/

    http://www.twi.co.uk/

    http://www.vauxhall.co.uk/

    http://www.visteon.co.uk/

    http://www.zytekgroup.co.uk/

    The DTI acknowledges the help and assistance

    given by the Society of Motor Manufacturers

    and Traders in compiling this brochure.

    Further information about SMMT and the

    UK automotive sector can be located on

    www.smmt.co.uk and www.autoindustry.co.uk

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