UK motor industry calls for a government ‘restart package’

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by Ray Massey, Daily Mail Motoring Editor 

Car bosses at the SMMT’s annual Summit – for the first time held ‘virually – set out a range of key challenges and opportunities facing the industry which will affect the face of motoring in the future: 

VIRUS CRISIS ACCELERATES THE DRIVE TOWARDS ELECTRIFICATION AND ‘ZERO EMISSION’ CARS

The coronavirus pandemic has accelerated the move towards electrification of cars by forcing manufacturers to prioritise, say bosses.

But Government must be realistic about the pace of change and be more flexible about the ‘bridging technologies’ – such as plug in hybrids- that will help everyone reach the ultimate goal of zero-emissions, they added.

Bentley chairman and chief executve Adrian Hallmark said his firm is already ‘fully committed to electrification’ and is ‘full speed ahead’ with plug in hybrids first with fully electrified cars to follow.

Elecrification had ‘accelerated’ as decisions on petrol and diesel models had been scaled back, he said:‘If you have to prioritise, where do you place your bets? More horse power or more battery cells? We’ve gone for the latter.’

There were shorter term challenges in making larger cars fully electric – mainly because of power and range. But these will be overcome, he said: ‘We are fully committed to electrrification. We see the next 10 years being radically different to the last 100 years.’

The government says it intends to end the sale of new petrol and diesel cars by 2035, though has said that date may be brought forward.

But Ford of Britain chairman Dr Graham Hoare, who is also exective director for business transformation, also gave a word of warning to ministers noting: ‘Given the size and scale of what we want to achieve in the UK, we will not see a shift from the internal combustion engine to all-electric vehicles in a single jump.

‘Customer confidence is not ready for leap yet, and the cost gap between petrol or diesel and all-electric vehicles is still significant. This is why a range of bridging technologies from mild hybrids through to plug-in hybrids are essential, and why plug-in hybrids also should be considered as a viable technology well into the 2030s.’

He said:’The next 15 years will be unparalleled in terms of the transformation of our industry. And the next five years will define the next fifteen.’ Ford alone was investing $11.5billion in 3 and a half years into electrrification, he said.

He believed there will be ‘different roads’ towards zero-emissions, including electric and hydrogen power which he said will be ‘one to watch’.

He noted: Some mixed technology will be necessary, even as we approach 2025.’ But he also predicted:’Diesel engines will be there for a decade.’

Mr Hoare noted:’We should be under no illusion that reaching this goal will require an unparalleled level of commitment and cooperation by a range of different stakeholders – government departments, local authorities, the auto industry, energy providers, and customers.

‘We need government to partner with us and have joint equity in formulating and delivering a comprehensive and consistent strategy that encompasses all stakeholders and that provides a path to the future – a path that also encompasses a range of technologies, including mild hybrids, hybrids and plug-in hybrids on the route to zero emissions.’

He cited the example of Norway which for 30 years has provided consumers with consistent zero emissions incentives and which has a recharging infrastructure with a density six times per person higher than that in the UK today.

Collaborations between rival companies will also be required to perfect the technology and create economies of scale – citing new links between Ford and Volkswagen.

Car bosses at Volkswagen added that the ‘lockdown’ – with few cars on the road – had made consumers aware of the benefits of clean air, adding to the demand for zero-emissions cars. 

SCRAPPAGE SCHEME AND VAT CUT

A scrappage scheme to get older polluting cars off the road and help kick-start production of newer, cleaner and environmentally-friendly vehicles would give a double benefit, said car-makers.

Air would be cleaner and jobs would be preserved.

It would also be particularly effective on the market for cars under £25,000.

Cutting VAT on the price of cars would also have a significant effect in stimulating the market, they said.

Ford of Britain chairman Dr Graham Hoare said both a scrappage scheme and a VAT reduction would be beneficial: ‘A VAT reduction is a good idea. It’s necessary.’

Bentley chairman and chief executive Adrian Hallmark said:’Both scrappage and VAT adjustments have a role to play.’

It would remove hundreds of thousands of older cars and replace them with cleaner vehicles, he said. 

EMERGENCY CONTINGENCY PLANNING: COVID AND BREXIT

Emergency measures to cope with the coronavirus pandemic have helped prepare car-makers in the event of a ‘hard Brexit’, car-makers revealed.

Bentely boss Adrian Hallmark said they had spent ‘millions of pounds’ securing extra warehouse space to stockpile parts during the coronavirus lockdown. It means they can stockpile for 5 to 10 days.

A ‘hard Brexit’ would create ‘a significant hit’ and he would prefer a Free Trade Agreement deal with the EU.

But they were prepared in the event of a ‘no deal’, he said: ’We have measures in place.’

Social distancing meant the firm was currently producing at 50per cent with safety measures in place:’We closed down early and started up early. Within three to four weeks we can have 100% capacity. We see a bold future beyond this crisis.’

Mr Hallmark, starting his third year at the helm, said the industry had experienced three crises in three years: problems with the switch to new ‘real world’ emissions measures; Brexit; and now Covid-19.

He said 45% of Bentley’s components are bought in, 90% are from the Continent, with 24% of completed cars going to the Continent. 

HOME WORKING BOOSTS PRODUCTIVITY

It’s been resisted by many firms for years.

But staff working from home have proved more productive. And car companies may have to adapt to that in future, they said.

Bentley boss Adrian Hallmark said 50% of the workforce were working from home during the pandemic.

Members of theforward planning and modelling teams had been working ‘day and night’ and actually providing more data than they could handle.

Ford boss Dr Graham Hoare said they too had seen ‘huge levels of productivity working from home.’

It flies in the face of previous more conservative thinking from bosses who feared employees working out of sight away from the office or factory would be less productive and more likely to watch daytime TV when they should be working.  

 



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