Simon Ordish reflects on the Autodesk Automotive Launch Tour and why innovation and investment will be vital for the Automotive Industry in 2018.
On 5th October Majenta Solutions hosted the UK leg of this year’s Global Autodesk Automotive Launch Tour, which had seen eight similar events including Sweden, Italy massive and Germany. The team who organised the tour will no doubt have been pleased that this was the last event and to be now re-patriated back with their wives, families and friends. With the event focussed on what 2018 will bring to the automotive design product suite, it was a chance to reflect on our partnership with Autodesk, to look back at 2017 for the automotive industry and on to what 2018 has in store.
I’ve now been with Majenta Solutions for nearly 20 years, in fact, it’s my 20th year in November. I’m hoping that there is a significant party planned, however, if there is then it’s a surprise party. Although I manage the full spectrum of Majenta Solutions’ Autodesk business – which spans general manufacturing, design and most recently, construction and the built environment, the automotive industry has always been very close to my heart. Over time, I’ve managed the accounts for many of those who attended the Automotive Launch Tour. It was great to see some familiar faces and some old friends but also a lot of new faces too. For those new faces, it was a great chance to tell them more about Majenta Solutions, and our partnership with Autodesk. We are the only company in the UK that partners with Autodesk to support their automotive portfolio of products. We provide training, consultancy and support for Autodesk’s industrial design and visualisation products, and we are the only company to make consistent investments in supporting this technology together with Autodesk.
In my opinion, the current times that we live in are particularly mad; we’ve got the threat of World War 3 looming, natural disasters seemingly every day, man-made terrorist atrocities happening weekly, and endless talk from the media about Brexit. Focussing on the automotive world, it too is having a crazy time. The industry is going through the most significant change since the invention of the internal combustion engine, as it steers towards electrification and autonomous vehicles. This revolution presents particular challenges that the automotive industry needs to overcome. Although challenging, it is an exciting time that we operate in, and there are lots of good things going on in the UK automotive market. It is exporting more than ever before, investing in research and development as a percentage turnover, creating more jobs, and UK automotive manufacturing is bucking the national trend regarding efficiency with the most productive workforce in Europe.
The automotive industry accounts for more than £71.6 billion turnover and £18.9 billion value added in 2016. The sector employs around 169,000 people directly in manufacturing and more than 814,000 across the broader automotive industry. More than 30 manufacturers build approximately 70 models of vehicle in the UK, supported by 2,500 component providers and some of the world’s most skilled engineers. Additionally, the automotive industry accounts for 12.0% of total UK export of goods and invests £4 billion each year in automotive research and development. The automotive industry is a vital part of the UK economy, which is why as an industry it must conquer the challenges of not only advancing technologies but the current political climate.
More impressive figures include UK car production, achieving a 17-year high in 2016 with 1.7 million cars built. Exports hit record levels for the second year running with 1.35million of UK manufactured cars exported to Europe, which equates to more than 1 in 2 vehicles. In total around 8 out of every 10 cars are now shipped to one of 160 markets worldwide. With 2017 starting in a cloud of uncertainty in the run-up to the referendum, it is encouraging that the automotive industry ended with positive production figures as a result of last year’s continued investment. However, continued investment from non-UK business owners is reliant on the outcomes from Brexit talks, so we are eagerly awaiting news, as are many of our clients. I’d like to say that I believe that our Brexit negotiations will produce a positive outcome for the UK automotive industry, but I’m afraid my confidence in the government has been rocked lately, and I think it’s too early to say. Therefore, we all need to future-proof our companies to remain profitable whatever the outcomes as trade and investment will be impacted in one way or another.
In the Autumn Statement, a £100 million investment for driverless cars and £80 million to install charging points for electric vehicles was promised by the Government. These investments create the demand for the UK automotive industry to meet these autonomous and electric vehicle goals. The requirement to develop entirely new platforms and drivetrains does not come cheap, and this needs to be financed utilising existing cash flows. This is where I believe innovation has a part to play and even with the threat of unsuccessful Brexit talks, the UK Government needs to step up the investment programs that already exist to support the UK automotive industry in being a stand-out innovator in both products and the way in which they are manufactured.
It is encouraging to see a growth in automotive R&D investment from 17% in 2015 to 24% in 2016, with companies already accepting the need to future-proof by exploring opportunities for innovation. Collaboration is a massive support mechanism for companies who have unique offerings but lack investment, or specific skills. There are already some partnerships across different businesses with the aid of various government-funded initiatives, such as the Digital Engineering and Test Centre (DETC) and the High-Speed Sustainable Manufacturing Institute (HSSMI). In fact, there are so many of these schemes that the SMMT have produced a document listing them all (available here). 57% of automotive companies have already started work to develop autonomous technology, and 64% are in the planning stages, companies looking to collaborate should look for gaps and where their business can be different.
When faced with the challenges impacting our industry, the future can seem daunting, but challenges can offer opportunities, force us to be innovative, to collaborate and realise the importance of investing in R&D, which in turn can allow our industry to thrive and remain integral to the future of the UK economy.
We would appreciate our customers’ thoughts and to hear about your specific challenges, so please share your insights with us. Majenta Solutions can help automotive companies overcome these challenges, remain a profitable business and stride ahead of their competitors. With over 20 years’ experience in servicing some of the world’s largest and most successful OEMs, alongside smaller and niche automotive suppliers, we are moving through these challenging yet exciting times alongside you.
Sources: SMMT Motor Industry Facts 2016, Lloyds Bank Automotive Report and Motor Trade News.