The great and the good of Britain's motor industry gathered along with members of government for the 93rd SMMT annual dinner this evening.

Lord Mandelson, minister at the Department for Business, Innovation and Skills, was the key note speaker.

Setting the scene was Joe Greenwell, SMMT president and chairman Ford of Britain.

Reflecting on what has been a challenging year, Greenwell highlighted how Britain's motor industry faced the recession head-on by encouraging collaborative action across the sector, ensuring that vital support was secured.

He looked ahead to 2010 and the priority the industry will give to sustaining the recovery and developing a stronger long-term future for the automotive sector.

Commenting on the last 12 months, Greenwell said: “One of the most important lessons we’ve learnt from this recession is that the UK motor industry is stronger when it works together to achieve a common goal.

“In 2010 we shall still face significant economic uncertainties globally and regionally.

"Scrappage Incentive Schemes, which have done so much to bolster demand in Europe, are coming to an end.

"In the UK we face pricing pressures from VAT increases and we face a general election too.

“We must continue to focus on skills development and it is vital that we attract a new generation of bright young people to our sector.

Greenwell added that the new Automotive Innovation and Growth Team, and the establishment of the Automotive Council, will provide a collaborative forum to plan and deliver the long-term future of the motor industry.

The full speech

 

My Lords, ladies and gentlemen, I am delighted to welcome you to this, the 93rd SMMT Annual Dinner.

I know you are looking forward to the evening's main event and a much more entertaining speaker so I won't keep you long.

I would just like to take a moment to reflect on what has been an extraordinary year for our industry and highlight the SMMT agenda for 2010.

The industry entered this recession stronger and more resilient than it has ever been.

We responded quickly to the very dramatic falls in demand experienced around the world.

Tough decisions were taken by all companies.

As the crisis unfolded here in the UK, SMMT responded too.

Exactly one year ago, the SMMT Executive was preparing for what became the first of several meetings with Lord Mandelson and many more with his officials at the Business Department.

We asked for loans and loan guarantees and saw the announcement of the Automotive Assistance Programme a few months on.

We asked for market stimulus and in May, we saw the start of a successful scrappage scheme.

We also asked for help with the severe finance and credit issues hampering our businesses and frankly, in these areas, we have been less successful.

It has been frustrating to see how quickly foreign governments moved to support their auto industries in this area while we in this country have had to wrestle with a banking sector that has come to regard automotive as high risk and a government that, despite its best intentions, has found it difficult to make real progress on these issues.

There is more work to be done here and our discussions with government and the banks must continue.

However, there is no doubt that the scrappage scheme has provided a very welcome boost to much of the industry.

The recently announced extension is a further important development.

Important because in the short-term, the outlook is still very difficult.

Against a high of nearly 2.6 million units in 2003, current expectations are for UK car registrations to fall to 1.8 million in 2010, below the 1.9 million expected this year.

Without scrappage, this year's total registrations would have been less than 1.7 million.

Commercial vehicle sales have been hit even more severely.

Against an all time high of 369,000 registrations in 1983, this year's market is set to close at around 220,000 units.

Total vehicle production in the UK is expected to drop from a high of nearly two million a decade ago to just over one million units, the lowest since 1982.

There is no doubt that, net of scrappage, underlying demand remains weak.

So we continue to ask government to focus on sustaining and strengthening the recovery.

One of the most important lessons we've learnt from this recession however is that the UK motor industry is stronger when it comes together around a common agenda.

Vehicle manufacturers and their suppliers came together and worked in partnership to help weather this storm.

To be honest last November, prospects for a scrappage scheme, indeed any kind of sector specific support, looked remote.

But close collaboration, particularly between the SMMT and the RMI, helped to provide a clear direction for our lobbying campaign.

I would like to thank Paul Williams, chairman of the RMI and Sue Robinson its director, for working alongside us during this difficult period.

I am committed to maintaining this relationship and working together on the big issues that affect us all.

I would also like to pay tribute to the work of Unite.

Tony Woodley and Derek Simpson worked hard to persuade the UK government of the need for action.

Their colleagues up and down the country share our determination to sustain the industry and plan a competitive future for it.

Lord Mandelson and his colleagues in the Department for Business, Innovation and Skills were also part of this collaborative effort.

Inevitably at times like this discussions with Government can be a little tense.

We do not always agree.

We do not always get what we want.

We are lobbying for more, better and faster support.

We should recognise the progress that has been made however.

In January, in the House of Lords, Lord Mandelson gave a short but very important speech.

In it he recognised the transformation in our industry in the last fifteen years.

He also acknowledged the strategic importance of our sector and the core role we play in generating prosperity and jobs.

We know that his personal involvement has been influential in securing support from his cabinet colleagues.

The publication in May of the snappily titled New Automotive Innovation and Growth Team Report, chaired by Richard Parry-Jones was another important event for the industry.

Earlier this month, Lord Mandelson confirmed that the government will support its key recommendations.

A high-level Automotive Council is to be established to foster the long-term partnership between industry, government, leading academic institutions and other key stakeholders.

This council will be co-chaired by Lord Mandelson and Richard Parry-Jones.

It will provide a collaborative forum to plan and deliver the long-term future of our industry. It will focus on the development of low-carbon automotive technologies and will drive our international competitiveness in this field.

The new Council will send a powerful message to global investors that things have changed in the UK and we will be competing actively for new investment and production opportunities.

The NAIGT technology group has developed a consensus technology roadmap, a research agenda and is currently completing an evaluation of the relative strengths of the UK in the technologies likely to be required to deliver ultra-low carbon vehicles.

The team also highlighted the major challenge of revitalising the UK supply chain.

A new Supply Chain Council will look to identify opportunities to facilitate the drive for global competitiveness and support the supply chain for ultra-low carbon vehicles.

I am hopeful too that the work of the NAIGT will allow us to start to dismantle some of the negative stereotypical images still associated with the UK Industry.

We do need to promote our strengths and achievements more clearly.

Our industry has changed.

We need to do a better job in getting that across and the SMMT will be taking a lead on this.

There is clearly some renewed enthusiasm in the corridors of power for manufacturing and engineering in this country.

The recognition that UK plc does need a more diversified economy, may have its origins in the crisis in the financial sector, but what matters, is that we take advantage of this new mood.

As we approach a general election, getting cross-party support for the NAIGT agenda is crucial.

As you would expect the SMMT has already been very busy on this front and thus far the response from the other main parties has been encouraging.

We must continue to focus on skills development.

We have a Skills Deficit in this country relative to international competition and we must narrow this gap.

If engineering and manufacturing are to help generate future jobs and prosperity in the UK then investment in innovation and skills must be core commitments from any future government.

It is vital too that we attract a new generation of bright young people to our sector.

Last week I sat on the judging panel for the Autocar-Courland Next Generation Award which will be presented later tonight.

We saw six students each of whom had the potential to contribute much to our industry.

I congratulate Autocar and Courland for their initiative and I congratulate each of the three finalists here tonight.

The UK has the most diverse automotive industry in the world.

It is home to 27 car and commercial vehicle manufacturers including, Aston Martin, Bentley, BMW, Jaguar Land Rover, Lotus, Morgan and Rolls Royce who help to make the UK the second largest producer of premium cars in the world.

These are iconic products admired and envied the world over.

We should celebrate such diversity and be proud of the technological prowess of these brands.

Finally a word about the SMMT team and its agenda for 2010.

At a critical time when our industry needed strong representation, I believe the team stepped up.

They raised their game.

Leadership, as always, is critical.

Paul Everitt, our CEO, has led the line impressively on our lobbying campaign and he has become a regular and very effective contributor to the nation's media channels. Konstanze Scharring, head of policy, and Nikki Rooke, head of PR, deserve a mention too.

I would also like to pay tribute to Graham Smith, my immediate predecessor as president who did much to begin the process of modernisation within the SMMT, an agenda we are accelerating.

So, with a nod to next year's general election here is our SMMT manifesto for the coming year:
 

  • We shall build on the success of this afternoon's event with a second international automotive summit, a new commercial vehicle operator show, new services for our members and further engagement with parliament.
  • We shall continue to lobby government on the issues of utmost importance to you, in particular access to finance and actually accessing the Government's Automotive Assistance Programme.
  • We shall promote the diversity of our industry and its world leading premium brands.
  • We shall continue to work closely with other stakeholders within our industry and foster the spirit of collaboration.
  • We shall promote the UK as a global centre for R/D, technological innovation and ultra-low carbon vehicles.
  • We shall continue to work to develop the skills of the sector's workforce.
  • We shall do more to promote the image of the industry and the career opportunities it offers to young people.

In 2010 we shall still face significant economic uncertainties globally and regionally.

Scrappage incentive schemes, which have done so much to bolster demand in Europe are tailing off. In the UK we face pricing pressures from VAT increases and exchange and we face a general election too.

During such times the SMMT has a responsibility to support its members and fight for the long-term future of the industry.

I can promise you we shall be working very hard to meet those obligations to you in the coming year.

Thank you for listening and have a great night."