surge applied research centre sustainable regeneration
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Phoenix from the ashes:Can low carbon vehicles ensure
the long-term viability of the West Midlands automotive cluster?
David Jarvis, Nigel Berkeley & Jason BegleySustaining Competitiveness: the WM economy in a global context
The Belfry, 06th July
SURGEApplied Research CentreSustainable Regeneration
2Presentation overview
• The state of play
• The scale of decline
• LCVs & the West Midlands region
• Conclusions
3• The car targeted as an accelerator of climate change and,
through congestion a cause of respiratory illness
• 14% of UK CO2 emissions in 2009
• ‘Low Carbon’ and ‘Alternatively Fuelled’ vehicles in a variety of guises emerging as a partial solution
The state of play The scale of decline LCVs & the West Midlands region Conclusions
4• Stimulated wide ranging academic debate but predominantly from an engineering and scientific
perspectives
• Little focus to date on potential economic opportunities
• Surprising for two reasons:
o Current forecasts of LCV penetrationo The relative decline of the UK automotive sector
The state of play The scale of decline LCVs & the West Midlands region Conclusions
5• UK no longer a ‘natural’ environment for car production
• Contraction in both assembly and supply-chain
• Still largest exporter of manufactured goods
• Q1 2012 registered first trade surplus since 1976
The state of play The scale of decline LCVs & the West Midlands region Conclusions
6• West Midlands auto cluster comprises 1,500 companies and employs
115,000 people
• Represents 28% of total UK output of automobiles and components
• But, limited R&D taking place in the UK, overseas ownership of UK brands and demise of volume manufacturing
The state of play The scale of decline LCVs & the West Midlands region Conclusions
7• Strength in design and performance engineering remains
• High profile OEMs still present (and investing) in the West Midlands
• Networks of niche vehicle manufacturers provide foundation for transformative shift to low carbon technologies(?)
The state of play The scale of decline LCVs & the West Midlands region Conclusions
8
The state of play The scale of decline LCVs & the West Midlands region Conclusions
Morgan Motor Company
Jaguar Land Rover
Aston Martin
Dennis Eagle
JCB
MG Motor
Westfield Sportscars
London Taxis Int.
Tata Motors
BMW Engines
9
The state of play The scale of decline LCVs & the West Midlands region Conclusions
Region Employment in 2010 % Location quotientNorth East 11,500 9.2 2.4North West 16,600 13.3 1.2Yorkshire and The Humber 8,800 7.0 0.8
East Midlands 9,400 7.5 1.1West Midlands 36,500 29.3 3.4East 9,000 7.2 0.8
London 4,700 3.7 0.2South East 10,800 8.6 0.6
South West 6,400 5.2 0.6Wales 8,100 6.5 1.5Scotland 2,800 2.3 0.3
Column Total 124,600 100.0Automotive employment is defined using the SIC group 29: the manufacture of motor vehicles, trailers and semi-trailers
SOURCE: Office for National Statistics, Business Register and Employment Survey
10
The state of play The scale of decline LCVs & the West Midlands region Conclusions
• Important to keep in mind the scale of decline of the West Midlands automotive industry over the past 40 years
• Design, development and manufacture of LCV will cannot recapture what has been lost
• Emphasis on wealth generation and not employment
1896 to 1899
1900 to 1909
1990 to 1996
1896 to 1899
1910 to 1919
1970 to 1996
17
The state of play The scale of decline LCVs & the West Midlands region Conclusions
Armstrong Siddeley’s Puma Road Entrance with the 1917 Burlington Works latterly occupied by Rolls Royce Aero Engines on the left
18
The state of play The scale of decline LCVs & the West Midlands region Conclusions
• Opportunities recognised – projects in place to explore possibilities:
o £38m LCVT programme – collaborative R&Do £14.5m CABLED trial of 100 vehicleso £12.5m lightweight technologies programmeo £10.2m intelligent transport systems test facilityo £10m vehicles customer interface technologies programmeo £4.5m niche vehicle R&D programme
• Aim is to create new and to safeguard existing jobs
19
The state of play The scale of decline LCVs & the West Midlands region Conclusions
Prodrive
Ricardo
Coventry University
WMG
AVL Ltd.
Potenza
Zytek
Precision Micro
MIRA
ARUP
CERAM
University of Birmingham
Microcab Industries
LCV supply chain and technology providers
LCV Manufacturers
Jaguar Land Rover
LTI Ltd.
Microcab Industries
Morgan Motor Company
Westfield Sportscars
CENEX
Existing LCV ‘infrastructure in The West Midlands Region
20
The state of play The scale of decline LCVs & the West Midlands region Conclusions
• Activity of this scale and breadth made possible by co-ordinating role of the former RDA
• Transformative shift to an ‘open innovation model’
• Knowledge sharing networks of SMEs
21
The state of play The scale of decline LCVs & the West Midlands region Conclusions
• Added value of regional stakeholders working together
• Capturing economic benefits requires a holistic approach
Privatesector
R&D andHE research excellence
Policy famework
and collaborative
projects
Supply-chain and technology providers
Low Carbon Vehicle
manufacturers
22
The state of play The scale of decline LCVs & the West Midlands region Conclusions
• West Midlands well positioned to exploit new opportunities
• But there are risks?o Formation of LEPs – fragmented governance structureso Potential for disinvestment by foreign owned OEMso Competition from other UK regions (e.g. The North East)o Lack of dominant LCV technologyo Lack of a market - Insufficient demand side stimulus
23
The state of play The scale of decline LCVs & the West Midlands region Conclusions
For example ...o BMW ‘i’ vehicle programmeo $560 million invested 2010-2013o Carbon fibre passenger cellso In house electric motor technologyo New plants in Leipzig and N. Americao Carbon neutral production
• Moreover, can niche firms in the West Midlands compete with the level of investment being made by major overseas OEMS?
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