The UK car industry faces challenges—and opportunities. The biggest bump in the road is of course Brexit, a political change that brings with it the possibility of huge disruption. As Shefali Kapadia points out in these pages , the average car is made up of around 30,000 parts, many of which are shipped in from overseas. Any interruption to the free flow of parts would pose a very substantial challenge.
Even when the vehicles have been made, the issue then becomes one of export. A full 80 per cent of cars made in Britain are exported and the effect of Brexit on that outflow is very uncertain. Such is the immediate foreground.
But further ahead a new set of challenges arise, many of them bringing opportunities. As Ben Oliver makes clear the automotive industry is confronting a period of profound technological change, the potential effects of which are only just becoming apparent. The most immediate challenge is for the industry to get on with the mass manufacturing of electric vehicles and to a certain extent that it already happening. The Prius is old news now. Even so, the need to create new propulsion systems and, more specifically, battery units, could well change the nature of the industry and the profitability of the car companies. The lithium ion battery is the most expensive part of an electric car and if the maker has to buy that technology from another firm, its profitability will be greatly affected. So though a now-familiar technology, the electric car will bring substantial changes.
Further on down the track, other more dramatic shifts will occur—perhaps. For when it comes to autonomous vehicles—that is, self-driving cars—there is still a good deal of scepticism about whether the technology can truly be mastered. But even if that “brain off” technology proves impossible to create, it seems likely that cars in the coming decades will come to rely more on data. Satnav systems will gather up more of it to plan the best route, and your car will constantly be checking itself for faults.
And as the onboard computer takes an ever-more important role, the question will become where manufacturers get their vehicle’s operating systems. In other words, will Google end up running your car for you? And if car makers do end up giving that area of the industry up to the big tech companies, precisely what would they have handed over?
There are huge opportunities here and the collection of pieces that follow makes clear that, if the industry gets it right, the opportunities will be substantial. But a gear change is coming. Hard work and some careful consideration will be required to ensure that there is a smooth transition between the cogs.
Shifting Gears | Ben Oliver | Journalist
The Shipping Forecast | Shefali Kapadia | Editor of SupplyChainDive.com
The Road to Zero | Jesse Norman MP | Minister of State at the Department of Transport
The “B” Road | Christian Wolmar | Author of “Driverless cars: on a road to nowhere”
A Time for Tech | Phil New | CEO of Energy Systems Catapult
Driving Innovation | Deirdre Fox | Director of Strategic Business Development at Tata Steel Europe