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Britain’s automotive industry ‘is far from dead’

Britain’s automotive industry is alive and well contrary to the poor September new car registrations, says Professor Garel Rhys, director of the Centre for Automotive Industry Research.

Speaking at a South Wales seminar held to look at the future of the UK automotive industry, Prof Rhys stressed that 28% of UK car plants’ output was bought in Britain and that over 72% was exported.

"The automotive industry accounts for 9.5% of UK exports by value and the UK factories turn out 3% of the global production and 9% of European production. It is the foreign buyer who keeps the UK factories going, not the home market," added Prof Rhys.

Nissan in Sunderland, Toyota in Derby and Honda in Swindon are the top three car plants in Europe and respected in other parts of the continent.

Even so, annual UK registrations of 2.5m are the fourth largest in the world and by 2010 it is possible the home market will hit 3m. With cars now surviving longer and about 500,000 being added each year, the total pool of cars in the UK could hit 30m by the end of next year.

"The motor industry in Britain has strength in making light medium cars, sports utility vehicles, specialist vehicles and petrol and diesel engines. What is needed is to improve the UK content of the vehicles and engines made in Britain," Prof Rhys said.

Prof Rhys added that if Britain was to keep ahead of competitors it must lead in testing and technology. He urged major suppliers at the seminar to spend more on research and development to give added value to the products.

He said, "There are problems but the industry is far from dead and the only question is what will it look like a few years from now? There are signs for hope."

Arthur Maher, of J D Power, told the audience at the Corus Port Talbot plant, that European car makers had taken steps to radically reduce over capacity in the last 12 months. But, even so there were likely to be about six million more cars made than sold by 2012 and that meant 15 car plants could close without affecting sales.

"This problem is getting worse rather than better," he said. "Consumer choice is accelerating. Fifteen years ago you had 200 model lines and now there are over 300 model lines, and the rate of growth has gone up from about seven new models a year to 17 annually."

Maher said model life was now an average of 3.5 years but in four years time it is likely to grow to four years as replacement cycles lengthen to cut costs.

Professor Jon King, director of Corus Automotive, said that looking towards 2020 there would be a need for 180 car plants worldwide to meet anticipated demand but the growth would not be in Europe, rather it would be in the Far East and developing world.

China will not be a major exporter of vehicles for the next 15 years but would be making them to fulfill its own home market demands with increasing industrialization changing Chinese society and bringing people from rural to urban areas to work in assembly plants.

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