“I’ve been in the industry for 40 years and watched with dismay as we squandered the opportunity to be one of the world’s biggest car manufacturers,” says John Neill, the chief executive of UK-based car parts giant Unipart.
He recalls how in the 1970s Britain was making around 2m cars a year. Meanwhile, the Japanese were only producing around 500,000. Within a decade, however, Japan had overtaken Britain to produce 10m cars annually.
Neill blames UK automotive’s decline on “great cars badly put together, weak management, unions led by trots and Maoists”, along with a government which “didn’t nurture” the sector.
All but one factor has changed, he says, with the industry now boasting improved quality, some of the best management in business, and unions that recognise they must work with companies.
The missing piece in the jigsaw, however, is having a government that decides it wants to back the car industry, rather than let it waste away.
His comments come as the sector faces the biggest challenge in its history: the transition to electric vehicles.
According to the UK motor industry, the road to zero carbon transport is an existential threat as British manufacturers race other countries to go green.
“We either lead and succeed or follow and fail,” says Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT).
The trade association’s new report, Full Throttle: Driving UK Automotive Competitiveness, contains a wish-list of what it wants to make sure it survives.
At the top of the list is government policy which backs the car industry, apeing Japan’s approach.
It wants the Government to announce a “binding target” of 60 gigawatt hours of battery capacity to be in place by 2030. These gigafactories would give UK manufacturers the capability to build up to one million electric cars a year and ensure tariff-free access to “critical” markets in the European Union,the report says.
The UK’s ban from 2030 on the sale of petrol and diesel cars – the first country to do so – means that being able to produce cars with alternative power trains is vital.
“The transition is something we all have to go through,” says Michael Cole, chief executive of Hyundai Motor Europe. “But the real question is how we get there and what are the enablers.”
He adds it’s “easy” for politicians to say “just get there” but they must understand that journey involves having the gigafactories to produce batteries or hydrogen fuel cells to power vehicles, the infrastructure to charge them, and making the cars affordable.
Battery gigafactories are the most pressing issue, and one where the UK lags behind other nations. According to the SMMT, by 2025 the UK will have 12 gigawatt hours (GWh) of battery production per year. That’s just over a tenth of the requirement if all the roughly 1.5m cars built here today were to be electric.
By comparison, Germany is expected to have 164 GWh by then, the US 91, and France 32. A further hurdle is that under the Brexit deal, from 2027 cars built in Britain will have to source their batteries either domestically or from Europe to enjoy free-trade deals the EU has struck.
While European countries are piling into gigafactories and other support to encourage electric vehicles, Britain is dithering. Nissan is due to announce plans for a battery plant at its Sunderland site this week, but the UK remains far behind its European counterparts.
“Other countries ask, ‘right, what do you want to build a gigafactory here?’,” says one insider. “That’s not what happens in the UK.”
Vauxhall-owner Stellantis is a case in point. It had been due to announce a new model for its Ellesmere Port site. However, according to boss Carlos Tavares, the day he expected to say a new internal combustion engine car would go there, Britain announced the 2030 ban.
Since then Stellantis has been in talks with the UK officials about how it can tap the £500m fund announced in the Green 10-point plan to encourage the UK’s car sector to transition to electric vehicles. Tavares said Britain “brutally changed the rules”, exactly the kind of unexpected change that discourages investment.
Alison Jones, Stellantis UK managing director, says the company is still deciding where to build a battery gigafactory in Europe. She is, however, critical of British politicians for talking a good game about electric vehicles but so far failing to deliver.
“That’s why it’s so important for the Government to make their statements and their actual investments in UK manufacturing,” she says.
The SMMT says that if the UK builds 60GWh of gigafactory supply by 2030, the UK car industry will remain stable and can build on its existing 180,000 or so manufacturing jobs.
However, a brighter forecast, at 80GWh, along with policies such as encouraging investment in the sector, could create 40,000 jobs. This could be a major boost to “auto heartlands” in the North East and the West Midlands, the report states.
On the downside, 30GWh of gigafactories is expected to mean stagnation and jobs ebbing away, while the trade groups “stranded” scenario of just a single gigafactory with less than 15GWh means 90,000 jobs disappearing.
Rachel Wolf, of consultancy Public First which produced the report, said: “If the Government does not set out right now [what it is willing to offer] it’s hard to see how we will catch up.”
Successful transformation as seismic as going to green motoring can’t succeed unless it has a comprehensive backing with all parties working together, says Cole.
“We can’t do it on our own,” adds the Hyundai boss. “Government, energy providers, everyone… we need their support.”
Neill is convinced that Britain’s automotive sector has moved on from the bad old days of the 1980s, and now just needs the Government to get on board to avoid repeating the “squandering” mistakes of the past.
“The industry has the leadership,” he says. “But does the Government have the appetite, ambition and above all aspiration to achieve the goal?”