Government and automotive sector urged to grasp £74bn digital manufacturing opportunity

The Society of Motor Manufacturers and Traders (SMMT) has called on the government to support the automotive sector’s future competitiveness by putting digital manufacturing at the heart of its industrial strategy.

The Digitalisation of the UK Automotive Industry

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The report, The Digitalisation of the UK Automotive Industry, commissioned from KPMG, highlights a £74bn opportunity for the UK if the industry fully embraces digitalisation over the next two decades.

It examines the future of digital manufacturing and outlines the benefits for the automotive industry, consumers and the wider economy, as well as highlighting the potential challenges the UK sector must overcome.

Alongside the ongoing development and incentivising of ultra low emission and connected and autonomous vehicles, it is hoped the transition to digital manufacturing will represent the biggest change for automotive manufacturing since the introduction of automation in production lines in the 1960s.

John Leech, head of automotive for KPMG in the UK, said: “The UK automotive industry is already the most productive in Europe […] The application of digital technologies to the design and manufacture of vehicles will help to secure the industry’s competitiveness in the decades to come.”

The report posits that new technologies such as intelligent robotics, 3D-printing and artificial intelligence, combined with new approaches to data management, will help manufacturers and the supply chain to save time, boost productivity, reduce waste and costs, and respond more effectively to consumer demand.

These technologies will also reduce plant maintenance and machine downtime, enable faster product planning and more accurate forecasting of customer needs. Customers, meanwhile, will enjoy greater levels of personalisation, more product content and connectivity, more responsive service and even shorter waiting times for new models.

Nissan Leaf production Sunderland

Jaguar and Nissan have committed to continue car production in the UK

By embracing digitalisation, the automotive manufacturing sector as a whole stands to gain £6.9bn every year by 2035, with a cumulative benefit to the wider economy estimated at £74bn. This is a significant amount, but the SMMT state there are challenges to be overcome by industry and government if it is to be realised.

Not only does the UK’s digital infrastructure need to be improved, but the skills gap needs to be addressed and investment in digitalisation accelerated. On top of this, clear policies on cyber security and standards for data sharing must be developed to promote trust.

By putting digitalisation at the heart of industrial policy, the SMMT is calling for government to ensure the UK remains a major global manufacturing destination.

Honda Civic production

Countries such as Germany, Japan and USA have taken the lead with a digitalisation strategy

Mike Hawes, SMMT chief executive, said: “Significant capital investment will be necessary and we must put digitalisation at the heart of the UK's industrial strategy to ensure we are equipped with the right skills, infrastructure and standards.

“The competition from other countries is intense, so we should follow the model that is proving so successful in the development of low emission and connected and autonomous vehicles in the UK, with a collaborative approach between government and industry.”

A survey of SMMT members readiness for digitalisation shows automotive companies are most concerned about funding, knowledge and skills development.

They called for government to help promote and encourage digital manufacturing, with measures including funding and tax incentives to support innovation and investment in new machinery, technology and plant development.

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