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'Red tape strangling the industry'


  • Eight out of 10 companies are optimistic about medium term growth
  • Nearly half warn of imperative to move production to low-cost markets
  • Fewer companies report problems recruiting skilled employees, but Level 3 skills remain most elusive
  • Nine out of 10 companies say costs will increase significantly in the next five years, through regulatory overload
  • 93 per cent believe government is not as committed as it should be to Britain's largest manufacturing sector

    Over-regulation threatens to cloud a bright future for companies in the automotive sector and could see more production moving to China and Asia.

    The warning comes in the Society of Motor Manufacturers and Traders’ report, ‘Automotive Manufacturing 2006 – the industry perspective’ based on the views of more than 100 senior executives.

    'Automotive manufacturing is alive and well and has a bright future', said SMMT president Roger Putnam. 'Productivity has improved, the skills gap is narrowing and business prospects are promising. However, the spectre of over-regulation looms threateningly. Government must heed our concerns and avoid the temptation to regulate Britain's largest manufacturing sector out of existence.'

    Some of the key statistics are presented below and, where relevant, compared with results from previous years:

    Published at SMMT's Annual Dinner last night, results were based on views from companies across automotive manufacturing. Respondents represented vehicle manufacturers, component suppliers and companies operating in the aftermarket.

    Industry response on key issues

    The warnings in the SMMT report follow publication of last year's CARS21 report in Europe, which highlighted the effect that inconsistent and conflicting regulatory objectives were having on European competitiveness.

    Recommendations were made to streamline rules and limit the cost burden to the industry.

    The SMMT fully endorsed these recommendations, and today urges the Government to follow these principles here.

  • Automotive Manufacturing 2006 – the Industry Perspective is now available to download free of charge from

  • Or you can view the report as a pdf here.
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