UK auto industry to get £1 bn funding for growth

The British automobile industry will receive £1 billion ($1.5 billion) from the government and the industry over the next 10 years to drive growth and global competence in the automotive sector.

The joint strategy is aimed at making the sector's long-term future more secure, expand the UK share of the value chain and secure strong global competitive positions in low-carbon research and development (R&D) and in premium and niche vehicles, the UK's department for business innovation and skills said in a release.

The plan will include a £1-billion investment for development of a new Advanced Propulsion Centre (APC) to support new technology and supply chains for low carbon vehicles, to be equally shared between the government and the industry.

The funding is backed by 27 companies in the UK automotive sector, including supply chain firms. This investment is expected to generate about 30,000 jobs currently linked to producing engines and could create additional jobs in new supply chains.

As part of the initiative, the government has set up a new Automotive Investment Organisation (AIO) within UK Trade & Investment (UKTI) funded by up to £3 million over the next two years.

The AIO's goal is to improve the image of the UK as a destination for automotive suppliers to invest and provide first contact to key potential investors. The organisation will also aim to double the jobs in the automotive supply chain to 15,000 over the next three years.

Special training programmes for apprentices, graduates and postgraduates will also be conducted for skill development in the automotive sector. The industry members of the Automotive Council expect to take on more than 7,600 apprentices and 1,700 graduates over the next five years.

UK business secretary Vince Cable said, "The UK automotive sector has been incredibly successful in recent times, with billions of pounds of investment and new jobs.

"With the next generation of vehicles set to be powered by radically different technologies we need to maintain this momentum and act now. Our industrial strategy will ensure we keep on working together to make our automotive industry a world leader," Cable further added.

Currently, the UK produces around 1.6 million automobiles, directly employing about 129,000 people, which is expected to rise to 2 million by 2017. Over 80 per cent of the production is exported across the globe. The sector is worth £11.2 billion to the country's economy.

The UK has attracted £6 billion of investment in the last two years from global vehicle manufacturers.

Currently, only a third of the parts that go into vehicles are manufactured in the UK. According to the automotive council, the opportunities could grow to £3 billion.

The new strategy envisages securing the long term future of the automotive sector by growing the investment in production, boosting the UK share of the value chain and by getting ahead of the game in R&D on ultra-low emission vehicles over the next 20 to 30 years.