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Growing UK automotive industry driven by low carbon policy focus

LowCVPThe current growth and success of the UK car industry has been positively influenced by policy centered on cutting carbon, according to a new report published today at the Low Carbon Vehicle Partnership’s Annual Conference.

Carried out for the LowCVP by E4tech and the Centre for Automotive Industry Research at Cardiff Business School, the study was conducted between March and June 2014.

The broad industry survey, supplemented by in depth interviews with senior executives showed that a consistent and sustained policy approach can produce both ‘green’ results and growth. The link between consistently applied policy and a ‘win-win’ in terms of investment and emissions performance was validated by the survey involving over 120 senior industry and stakeholder respondents.

UK investments in the low carbon automotive sector have amounted to about £40bn since 2003, a figure which matches increases in the turnover of the sector, also accompanied by a 10% increase in UK exports from the sector over the last 10 years.

In the early 2000s, the car industry was in a state of decline. Factory closures were commonplace, innovation was minimal, and the supply chain had become hollowed out. Environmental regulations were seen as a threat in some quarters.

This started to change with the establishment of a more active, collaborative industrial policy driven by the need to cut carbon emissions from the sector and protect against climate change.

The LowCVP Managing Director, Andy Eastlake said:

“The emphasis of policy makers on environmental achievements and ‘green growth’ has bolstered the foundations of the UK automotive sector.

“Experience over the last ten years shows that a consistent policy approach based on collaboration between all stakeholders can deliver dividends. This represents the first strides on the road to meeting the environmental imperative of decarbonising road transport by 2050.

“There are, however, no grounds for complacency and the job is far from done. We urgently need to repeat the success seen in our passenger car and bus sectors, in all aspects of road transport such as the truck and commercial vehicle industries and of course the supply of low carbon fuels and energy to power all forms of transport.”

One of the report authors, Adam Chase, Director of E4tech, said:

“It’s unusual to receive such a consistently positive message when reviewing the effects of government policy.

“Time and again we heard that a long term vision, collaboration and supportive policies are giving companies the confidence to invest in low carbon developments. Where these are missing the opposite is true.”

With its investment in production of the electric Leaf in Sunderland and in battery production nearby, Nissan has been one of the leading auto industry investors in the drive for low carbon in the UK. Nissan’s Jerry Hardcastle OBE, General Manager, Innovation and Performance Projects and a senior industry respondent to the study said:

“The NAIGT clearly identified that the requirement to produce low carbon vehicles was a major driver of change. We needed an engaged and determined body to show strategic direction. The collective strengths of the UK automotive industry have been galvanised through the Automotive Council to introduce low carbon vehicles and promote sustainable growth.

“This report clearly shows the evidence of the work so far. The journey has only just started; we need to seize the opportunity for further growth.”

Read our report on the 2014 LowCVP Conference – coming soon