Special Report

November 27, 2014

The Advantages and Development of the UK Motor Industry — Exclusive Interview with Mr. Mike Hawes, Chief Executive of the Society of Motor Manufacturer and Traders (SMMT)

Profile: Mike Hawes became SMMT Chief Executive on 2 September 2013. He has more than 20 years experience in policy and public affairs, the majority of which has been spent in the motor industry. He joined SMMT from Bentley Motors where he held a number of PR, corporate and public affairs roles. Prior to that, he also worked for both Toyota and, more recently, Bentley’s parent company, Volkswagen AG, where he developed the European and global knowledge needed for this challenging role.

According to statistics, the export of British automobile in 2013 reached 24.8 billion pounds that has doubled the 12 billion pounds in 2004, 8% of which was collected from the automotive industry. In response to this achievement, the Society of Motor Manufacturers and Traders (SMMT) has been playing a particular active role. SMMT was founded in 1902 with over a hundred years of history and is the best witness of the development of UK Motor Industry. It is a strong impetus to the improvement of the UK Motor industry at home and abroad. Additionally, it also effectively facilitates the UK Motor Industry to develop its potentials and surpass competitors relying on its good relationship with government, stakeholders and the media. Mr. Mike Hawes, the Chief Executive of the Society of Motor Manufacturers and Traders attended GAF 2014 as a VIP guest on Oct. 16-17. Before the opening of the Forum, we interviewed Mr. Mike Hawes and asked him to share with us his perspectives on the advantages and development of the UK Motor Industry.

Mobile World: According to SMMT, the export of British automobile in 2013 reached 24.8 billion pounds, which has doubled the 12 billion pounds in 2004. The export of automobile takes up 8% of Britain’s total export. How should we interpret the achievement of the British automobile industry?

Mike Hawes: The UK motor industry has experienced a renaissance in the past few years with exports doubling, investment exceeding record levels and the retail market growing for over two and half years – outpacing any other market in Europe. The UK automotive sector is incredibly diverse: in addition to volume car producers such as Nissan, Toyota, Honda and GM, the UK is headquarters for a range of globally desirable brands – from Rolls-Royce and Bentley to Jaguar Land Rover, Aston Martin and MINI. Some of the most innovative design and engineering companies in the industry are based in the UK, as well as eight of the 11 Formula One teams. The turnaround has been driven by a partnership between industry and Government ensuring the UK automotive sector is open, highly skilled and competitive. It has become the best location in Europe to do automotive business.

MW: It is reported that 80% of the passenger vehicles, which are produced in Britain, are sold to other countries. Would there be any negative effects to Britain’s automobile industry? There could be a lot of problems, if the export markets shrank.

Mike Hawes: The openness of the UK automotive sector is a real strength. Although around half of UK exports go to the rest of the EU, the industry has diversified into global markets; China, the US and Russia are the biggest single markets supplemented by growing demand for UK products in the Middle East and Asia Pacific. This has ensured the sector has continued to grow despite stagnant European markets, underlining the inherent competitiveness of the UK automotive industry. Global demand for British brands and British quality in engineering has attracted unprecedented levels of investment which is ensuring a robust future.

MW: As you know, China is witnessing an intense anti-monopoly investigation. And Britain is one of the major exporting countries of luxury cars. Will it impact on the British automobile industry?

Mike Hawes: The UK automotive industry is aware of the some anti-monopolistic investigations by the Chinese authorities but believes its companies have complied, and continue to comply, with all national and international competition policies. China is an important market for the UK sector and will continue to be so. Our premium and high-luxury vehicles, like other British products, are in demand globally as they represent the pinnacle of automotive excellence.

MW: In July 2014, Mr. Chad Woodward of the British Embassy said, it is the best time for the Chinese companies of automobile industry to invest in Britain, because there is a gap of 3 billion pounds yet to be filled. What are the most important characteristics of the British automobile industry that can attract Chinese companies? And what kinds of favorable conditions can Britain offer?

Mike Hawes: The UK has always been open to inward investment and the conditions in the UK automotive sector are extremely favourable. Over £8 billion has been committed by major OEMs to UK facilities, increasing production volumes and R&D development. However, a decline in the UK supply chain over the past two decades means there is a shortage of local suppliers. OEMs are looking for local supply of key components with a recent survey identifying over £3 billion of opportunity. Investors can take advantage of openness unlike most of the rest of Europe. A competitive tax regime, highly skilled workforce, innovate design and development facilities and some of the most prestigious universities academic institutions in the world make the UK one of the most attractive locations for inward investment. Chinese companies such as Geely and BYD are already in the UK which provides tremendous opportunities for growth and development.

MW: The market of the new energy vehicles are also booming in Britain. What plans do you have for the development of the new energy vehicles? Will there be any preferential policies to a certain type, such as plug-in hybrid or pure electric vehicles? And how is the construction of relevant infrastructure, like charging station, going?

Mike Hawes: Industry and the UK Government are working together to make the UK one of the leading markets for the development and take up of low emission vehicles. There is a package of incentives to encourage both the introduction of these new vehicles and the development of new technologies. The Automotive Council – an industry-government partnership – has identified a road map for the introduction of new vehicles including battery electric, plug-in hybrids, fuel cell, alternative fuel vehicles and other innovations around personal mobility. Given the Automotive Council includes the public sector, fuel companies and financial institutions as well as automotive companies, the provision of the requisite infrastructure is part of this plan. We are already seeing increasing numbers of charging points and other fuel stations which is set to grow. However, demand side is equally important, and a consumer awareness campaign is underway, funded – in a first for the UK –by both the industry and Government. UK customers, who have traditionally been quick to embrace new technology and innovation, are responding accordingly.

-Published on pages# 30 & 31 November-2014 edition of MOBILE WORLD Magazine

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