SMMT Sustainability Report 2017 Online

2017 UK AUTOMOTIVE
SUSTAINABILITY REPORT
18 EDITION 2016 DATA
FOREWORD
The UK automotive industry vehicles with advanced engine and emissions control
had another successful year in technologies will continue to be fundamental to air quality
2016, with production achieving solutions, while diesels will remain vitally important in
the best performance since lowering CO 2 emissions.
the turn of the century, record
exports and an all-time high for Industry recognises and is responding to the air quality
new vehicle registrations. At challenge, to climate change and to the need to deliver on its
the same time, manufacturers social responsibilities. It makes a vital contribution to the UK
delivered on key environmental economy and we will continue to engage with policymakers
indicators, including CO 2, to ensure the industry remains competitive and innovative –
energy, water and waste and, importantly, rooted in the UK to help maintain jobs and
per vehicle produced, while maximise the economic potential of the nation.
improving their economic and
social performance. For this report, we welcome three new signatories: Lotus,
McLaren Automotive and ATP, a remanufacturing company,
This progress puts the industry on a good footing to meet further enlarging the breadth of businesses this report
the challenges ahead, not least Brexit, skills shortages and covers. Lotus and McLaren Automotive join Aston Martin
the need to improve air quality and CO 2 emissions. 2017 sees to give the report additional insight into the small volume
the introduction of a new test cycle to measure CO 2 and fuel manufacturing sector and you’ll find a specific focus on this
economy which will deliver more representative figures for sector on page 11. The total number of signatories has risen
consumers. At the same time, new vehicle types will have to to a new high of 28, representing an even broader range of
comply with the toughest new emissions standards in the member company activities.
world, including Real Driving Emissions tests designed to
measure cars’ on-road performance for the first time. In addition, for the first time, SMMT has undertaken a
materiality assessment, examining current, emerging and
And, as this latest report shows, progress remains strong on future priorities of vehicle manufacturers and suppliers, as
a number of key sustainability indicators. UK manufacturers well as other stakeholders, including government advisors,
have continued to improve the environmental performance academics, charities, environmental NGOs and trade unions.
of the vehicles and components they produce, as well as The findings, which you can read on page 25, will help
within their manufacturing processes. In 2016, average CO 2 shape future reports, ensuring they continue to provide a
emissions per vehicle fell -2.9%; energy use fell -3.2%; water true reflection of the industry and its progress in improving
use fell -3.5%; and waste to landfill was down -33.7%. In sustainability, aiding strategic planning, operational
fact, almost 90% of waste was recycled in 2016. management and future investment decisions. n
Despite the increase in production, industry employment

levels remained stable at 169,000 employees. Productivity
is now at a record high, with 11.8 vehicles produced for
each person employed in the industry. Investment in skills
rose, with the number of days’ training per employee
up 9.1%. Despite this, skills shortages persist – and we Mike Hawes Chief Executive
continue to work closely with government to help develop The Society of Motor Manufacturers and Traders (SMMT)
existing talent and attract the employees of the future.
Government’s Industrial Strategy will be integral to this
issue, as well as helping industry remain competitive to
attract further inward investment and enable growth
and innovation, particularly in the development of next
generation connected, autonomous and low-emission
vehicle technology.
The pathway to improved CO 2 and air quality performance

will be reliant on a variety of technologies: improved
diesel and petrol vehicle technology, as well as alternative
sources such as electricity and hydrogen. That’s why SMMT
advocates a technology-neutral approach to fleet renewal,
promoting the right technology for specific driving needs.
While industry continues to invest in alternatively fuelled
vehicles – with more than 60 different models available on
the market – uptake is still low. Modern petrol and diesel
Page 2 | 2017 UK Automotive Sustainability Report THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS
SUMMARY
Output up
8.3% to
Training days up 9.1% 1.82 million units
ODUCTION
R Energy per vehicle
produced down 3.2%
P
Sector employment
to 2.00MWh/unit
stable at 814,000
Waste down 33.7%
Workplace incidents
Water per vehicle
down 18.6% produced down 3.5%
RECORD LOW to 2.4m3/unit
PEOPLE
USE
95% of a vehicle (by Registrations up 0.2%
weight) is reused, recycled to 3.1 million units
or recovered
LES
END
New car CO2 down

1.1% to 120.1G/KM
OF
IC
-LIF E V E H
-
Average age of vehicles at

Investment in AFVs
scrappage continues to resulted in registrations
increase, now 14.1 years up 22.2%
PRODUCTION (pages 5-13) PEOPLE (pages 14-15)

n Automotive manufacturing turnover up 9% ■ Signatories’ employment up 11.8%
n UK vehicle production 1.8 million, up 8.3% ■ Number of training days per employee up 9.1%
n Energy use dropped by 3.2% per vehicle ■ Accident rate fell to record low, down 5%
n All relative environmental performance ■ Staff turnover just 5%
improved
USE (pages 16-22) END-OF-LIFE VEHICLES (pages 23-24)

■ New vehicle registrations up 0.2% to record 3.1 million ■ 95% ELV target met in 2016
■ Alternatively Fuelled Vehicles volumes took ■ Increasing remanufacturing extending vehicle life cycle
3.3% market share

■ New car CO2 emissions fell 1.1% to 120.1g/km
■ Number of low carbon buses on the road increased to
3,700, 4.2% of bus parc
THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS 2017 UK Automotive Sustainability Report Page 3
SUMMARY: KEY PERFORMANCE INDICATORS (KPIs)
% change
Units 2000 2015 2016
2016 on 2015
AS Number of signatories 17 27 28 3.7%
ECONOMIC PERFORMANCE
Automotive manufacturing sector turnover * (£ billion) 47.9 71.0 77.5 9%
Expenditure on Business R&D ** (£ billion) 0.9 2.5 2.5 0.0%

WI
Total number of cars and CVs produced (million) 1.8 1.68 1.82 8.3%
Total new car and CV registrations (million) 2.5 3.06 3.07 0.2%
AS Signatories’ combined turnover (£ billion) 21.0 75.1 74.9 -0.2%
VMs Total number of vehicles produced (million) 1.6 1.66 1.81 8.9%
ENVIRONMENTAL PERFORMANCE
Production inputs
AS Total combined energy use (GWh) 7,013 4,588 4,673 1.9%
VMs Energy used per vehicle produced (MWh/unit) 3.9 2.07 2.00 -3.2%
AS Total combined water use (000m )3

6,090 5,344 5,516 3.2%
VMs Water use per vehicle produced (m /unit)

3
5.3 2.5 2.4 -3.5%
Material outputs
AS Total combined CO 2 equivalents (tonnes) 2,182,926 1,316,989 1,344,026 2.1%
CO2 equivalents per vehicle produced (tonnes/unit) 1.1 0.58 0.56 -2.9%
VMs Volatile Organic Compounds emissions (cars) (g/m 2) 55.0 33.6 32.2 -4.2%
Volatile Organic Compounds emissions (vans) (g/m 2) 59.0 50.3 50.6 0.5%
AS Total combined waste to landfill (tonnes) 80,399 4,415 3,180 -28.0%
VMs Waste to landfill per vehicle produced (kg/unit) 40.3 2.0 1.4 -33.7%
Vehicle use
AC Average new car CO 2 emissions (g/km) 181.0 121.4 120.1 -1.1%
SOCIAL PERFORMANCE
WI Number of jobs dependent on the sector*** 907,000 814,000 814,000 0.0%
Combined number of employees 100,036 98,161 109,890 11.9%
AS Number of lost-time incidents per 1,000 employees 13.4 2.0 1.7 -18.6%
Number of training days per employee 3.8 2.7 2.9 9.1%
Key – See p10 for full details. AS Signatories WI Whole Industry VMs Vehicle Manufacturers only
MATERIALITY ASSESSMENT
To gather insight on the relative importance of specific environmental, social, governance and other issues to the stakeholder base and the automotive industry
itself, SMMT appointed an external organisation to conduct a materiality assessment. The study identified a wide range of issues, most of which were ranked as
important or very important to the industry and external stakeholders. We plan to use the outcomes to inform future sustainability reporting.
The assessment consisted of desk-based research, interviews with external stakeholders and a stakeholder workshop to review findings. A wide range of
stakeholders were consulted with academics, charities, consultancies, environmental NGOs, government advisory body and trade unions. To draw on the
assessment conclusions, this report will explore the most material issues identified.
GLOBAL TRENDS
During the materiality assessment, external stakeholders and SMMT members highlighted the importance of global mega trends - such as the sharing economy,
urbanisation, climate change, air quality, an ageing population, connected cities and alternative powertrains – and their impact on the automotive industry and
the future of mobility. These trends will interlink and are widely expected to create new business models and innovations.
The trends are developing in the context of globalisation and geopolitical uncertainty. These can manifest themselves into significant political shifts, as evident
in 2016 in the US and the Brexit vote in the UK (see page 10). These changes create business uncertainty, with diverging legal and regulatory schemes, currency
fluctuation and customers’ expectations, which need to be taken into account and will impact on the automotive sector.
PRODUCTION
PERFORMANCE REASONS FUTURE CHALLENGES

■
Vehicle output up 8.3% ■
Global economic recovery, ■
Creating shared value by creating
■
Energy per vehicle down 3.2% including in the EU economic and social benefits
■
Relative waste and water use ■
Benefits of recent inward ■
Improving competitiveness and
down 33.7% and 3.5% respectively investment productivity to attract future
■
Increased output of premium and ■
Ongoing focus to minimise investment
luxury vehicles environmental impact and improve ■
Addressing the challenges
competitiveness of Brexit and wider political
■
Starting on the road towards uncertainty
digital manufacturing ■
Adapting to requirements of an
■
Working with government to ageing population
ensure UK competitiveness
The UK automotive industry has been exceptionally successful in recent years, with car production at its highest level
since 1999, exports at record level and an increasingly competitive UK supply chain. Now the automotive sector is going
through further transformation, including, for example, digitalisation and increasing automation of manufacturing. It is
expected that the industry will change more in the next five years than in the past 50. At the same time, political, economic
and social changes, notably in the UK and US, create uncertainty for businesses. This uncertainty was affirmed during the
materiality assessment and could become the most significant challenge to the industry’s competitiveness in a generation.
UK AUTOMOTIVE PRODUCTION EU, which grew 25% in 2016 and accounted for 94% of total CV
UK car production achieved a 17-year high in 2016, with exports. The counterbalance of a 48% reduction in CV exports
1.73 million cars produced by 15 manufacturers. This was an to the rest of the world was led by a decline in Asian demand.
8.3% rise on 2015 car production, and a significant contribution The overall picture for UK vehicle production remains positive
to the 8.3% overall increase in total vehicle production. Ten despite uncertainties with an independent report by Auto
brand new car models began production in the UK last year, Analysis revising projections for UK vehicle production in 2017
nine of them from premium brands. This helped make the UK to reach 1.9 million vehicles, led by strong growth to export
the second biggest producer of premium cars after Germany markets for both cars and CVs and increased investment in
and the third biggest car producer overall in Europe. the UK providing a boost to engine production. Many of the
projections for future production are based on assumptions
As a proportion of the mix, cars accounted for 95% of UK vehicle of transition as the UK leaves the EU, with the latest report
production and 96% of UK vehicle exports in 2016. Light vehicle suggesting the UK may fall just short of its 2 million vehicle
engine output grew 7.5%, to 2.54 million units, supported by output potential in 2020.
the new Jaguar Land Rover plant in Wolverhampton and this
provided a boost to the UK’s domestic demand for engines, which DHL’S NEW EAST MIDLANDS HUB
grew significantly in 2016. Exports of UK engines still accounted DHL’s hub at the UK’s East Midlands Airport demonstrates
for the majority of production, with 55% of those produced excellence in sustainability. Following an extension
destined for export markets. The UK has a reliance on Europe, investment of €23 million at the 174,000 square metre site,
which supplies a significant proportion of components that go the hub improves delivery services in the UK by handling
into UK built vehicles, highlighting the critical importance of 450 trucks daily and serving 24 incoming and 24 outgoing
tariff-free and barrier-free trade for the UK automotive sector. flights per day. The facility includes energy efficient features
such as internal and external LED lighting and a solar
Exports of UK produced cars grew 10% in 2016, with 78% of photovoltaic system that enables on-site power generation.
production intended for external markets. The majority of 100% of the hub’s electricity comes from renewable
which (56%) was traded with the EU, a slight decline in terms sources. In addition, waste recycling since 2004 has
of percentage share. Exports of cars to the rest of the EU still increased from 77.6% to 90.5%.
grew 7% in 2016, to just under 750,000 for the year in total. UK
car exports to non-EU markets were stronger still with growth
of 13%, rising from an increase in popularity for UK premium
cars in markets such as the US.
UK Commercial Vehicle (CV) output remained broadly steady in

2016, with an output of 94,000 vans, trucks, buses and coaches,
a small 0.6% decline. Exports of UK built CVs represented 4%
of total UK vehicle exports, with 16.2% growth in 2016. The
number of CVs manufactured for export markets continued to
grow, with 58.4% of production exported, the largest proportion
in seven years. This was driven by an increase in exports to the
PRODUCTION
PRODUCTIVITY RESEARCH AND DEVELOPMENT

Using official statistics, we can estimate that each automotive Expenditure on business research and development in the
manufacturing employee contributed £130,000 of added value automotive sector in 2016 totalled approximately £2.75 billion.
to the industry in 2016. At current prices, value added per This figure is up 10% from £2.5 billion in 2015.
employee has more than doubled over the past eight years
led by stable employment levels and exceptionally strong PSA PEUGEOT CITROËN NEW PARTS
growth of added value, the sector’s contribution to GDP. The DISTRIBUTION STRATEGY
effects of industry restructuring and investment continue to
PSA Peugeot Citroën has boosted the efficiency of its parts
feed into sector performance with advances in manufacturing
distribution centre by appointing 30 dealers to act as regional
automation. Productivity growth across the rest of the sector,
hubs to deliver parts to local dealers three times a day, instead
including in vehicle distribution and repairs, continued to
of delivering to 500 outlets across the UK. Those introduced
improve in 2016.
efficiencies helped lower operating costs and provide
environmental benefits by reducing the number of trucks on
TURNOVER the roads and therefore emissions. The changes also improve
The success of automotive manufacturing in 2016 can be seen customer satisfaction, because parts are available on the day
in the growth of vehicle production and exports. Moreover, the to the majority of the dealers, which means typically cars can
success of the sector including retail, distribution and repairs, be returned to the customers on the same day.
has been boosted by a record number of new cars demanded by
UK customers, with 2.7 million registered in 2016, up 2.3% on the
previous year. Automotive manufacturing turnover continues
to climb to an estimated £77.5 billion (SMMT estimate based on
official data), a new high and up 9% on 2015. SMMT estimates of
value added were £21.5 billion, up 7.3% on 2015.
Signatories reported £74.9 billion turnover (note; signatories

include more than just manufacturers), this represented a
drop of 0.2% on the previous year. This was mainly the result
of one larger signatory showing a downturn, however, many
others reported growth.
INVESTMENT DURING 2016
Castle Bromwich
Jaguar Land Rover
£100 million Sunderland
Expand its West Midlands manufacturing Nissan
£100 million
Production of the New Juke
Wolverhampton New Qashqai and X-Trail models
Jaguar Land Rover safeguards 700 jobs into next decade
£450 million Infiniti
Engine manufacturing centre 300 new jobs
Production of the Q30 and QX30 models
Solihull
Jaguar Land Rover
£250 million
1,300 new jobs investment in lightweight
technologies announced
Swindon
Honda
All-new Discovery revealed 500 new employees
support production of new 5-door Honda Civic
£200 million
Bridgend Manufacturing centre in Swindon to produce
Ford the next generation 5-door Civic
£181 million
New low-emission engines at Bridgend plant
PRODUCTION: ENVIRONMENTAL PERFORMANCE
The UK automotive industry constantly strives to improve its performance. Automotive production processes are
the perfect example of where improved efficiency can reduce costs, increase competitiveness and minimise the impact
on the environment. Further implementation of digital manufacturing and automation will most likely further improve
the overall efficiency and the resource efficiency of automotive production processes.
ENERGY CHART 1 | ENERGY USE AND VEHICLE PRODUCTION

In 2016, energy use per vehicle produced decreased by 3.2%,
5,000 Total energy use (AS) GWh kWh per vehicle (VM) Production 2.5
to reach 2MWh (Chart 1, right). This was achieved thanks to
Energy – Total (GWh) and p/vehicle (kWh)

ambitious in-house targets and increased production levels. It
4,000 2 .0
Vehicle production, millions

should be noted that the relative figure also includes energy
used by some signatories to produce engines and powertrains
3,000 1. 5
destined for export. Recent increases in engine production
capacity could impact the overall industry performance.
2,000 1.0
In 2016, vehicle manufacturers’ (VMs) absolute energy usage

1,000 0. 5
increased by 5.2%, which followed an 8.9% increase in production.
0 0
The latest energy management system, ISO 50001, has been 2000 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16
embedded in the production processes of four signatories:
Bentley, Honda, Leyland Trucks and Toyota. RENEWABLE ENERGY
In 2016, the number of signatories reporting on their on-
ENERGY SAVING AT MCLAREN AUTOMOTIVE LIMITED
site renewable energy production remained stable. Eleven
The McLaren Technology Centre (MTC) was designed to signatories produced 57.7GWh of energy, which would be
maximise natural light and LED energy-efficient bulbs sufficient to power 14,420 homes. This represents a 3.2% drop
were installed throughout to reduce energy usage. on the previous year’s performance. This may be due to less
MTC has two combined heat and power systems (CHP) favourable weather conditions, for example less wind. In addition,
installed which reuse the heat produced during the one signatory reported metering issues.
energy production elsewhere in the building. MTC also
uses a man-made lake located next to it, to assist the CO2
building’s cooling system by regulating the temperature CO2 emissions are calculated based on the official conversion
and decreasing the need for cooling towers. factors for each energy stream used by manufacturers. Last
year, Defra reviewed its conversion factors to account for a
Through efficient use of the existing Building Management lower carbon footprint of energy production in the UK, resulting
System, McLaren Automotive Limited only increased electrical in industry figures for the past two years being revised.
consumption in the Production Centre by 20% in 2016
compared with 2015, despite introducing an additional shift and VMs’ absolute CO2 emissions increased by 5.6% year on year,
almost doubling total production. The second shift started in in line with the energy usage increase of 5.2%. CO2 per vehicle
February 2016 with the new roles adding approximately 40% to produced was down by 2.9% to 0.56 tonnes of CO2 equivalent.
the existing headcount in the Production Centre. However, by Electricity accounted for 43.3% of the overall energy used
the end of 2016, electricity consumption was reduced to below by VMs. Green energy made up 11% of all the electricity
2015 levels in the same period. purchased in 2016 (Chart 2, below).
CHART 2 | VM CO2 PRODUCTION: TOTAL AND PER VEHICLE

Total CO2 equivalent (t) (VMs) CO2 equivalent (t) per vehicle produced (VMs)
2,000 1.4
CO 2 equivalent per vehicle (tonnes)
1.2
CO 2 equivalent (tonnes) ,000s
1,600
1.0
1,200 0.8
0.6
800
0.4
400
0.2
0 0
2000 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16
Some signatories such as Bentley Motors, Toyota Motor

Manufacturing UK and McLaren Automotive have had their CHART 3 | TOTAL VM WATER USE AND ON A PER
VEHICLE BASIS
carbon emission reductions certified annually by Carbon Trust,
to ensure continued improvement.
8,000 Total water use (VMs) m3 per vehicle produced (VM) 7
Honda Motor, Nissan Motor Company, PSA Peugeot Citroën and
Toyota Motor Corporation have all now committed to science- 6
based sustainability targets covering their global operations.
6,000
Combined water used (000m3)

This sets targets in line with the level of decarbonisation 5
required to keep global temperature increase below 2°C
m3 per vehicle (line)

compared to pre-industrial temperatures. 4
4,000
WATER 3
Water use per vehicle produced has dropped 3.5%, to a new
low of 2.4m3 per vehicle. This could be attributed to further 2
2,000
improvements in water reuse, and painting processes where
most water is used. However, due to the overall increase in 1
production levels, absolute use increased by 3.2%.
0 0
1.2% of the overall water used by VMs came from sources other 2000 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16
than mains water such as rainwater harvesting (Chart 3, right).
LEYLAND TRUCKS IMPROVES

TESTING FACILITIES
In 2016, the first phase of
improvements for Leyland
Trucks' dynamometer and brake
testing facility involved the
installation of a dyno, which
includes regenerative dyno and
brake technology. It will generate
electricity during the test cycle
and reduce energy consumption
by more than 300,000 kWh/year.
This more efficient facility will also
provide significant fuel savings
due to reduced test cycle times.
FORD’S DAGENHAM CUTS WATER USAGE

The installation of a new production line has helped Ford’s
Dagenham Engine Plant reduce its water use by 98% while
reducing energy. A two-year, £475 million investment
(including £9 million from the government), enabled the
installation of the first line at Dagenham to use Minimum
Quantity Lubrication (MQL). MQL replaces the traditional need
for coolant (a mix of oil and water) to keep machines running
at the correct temperature by replacing it with a fine mist
of lubricant. In the past, about 100,000 litres of coolant had
to be cooled to keep it at the right temperature. The water
saving equates to around 17.5 million litres per year – enough
to fill seven Olympic-sized swimming pools. MQL also means
less oil in the air and around the general environment, which
also saves water needed for cleaning.
WASTE CHART 4 | VM WASTE –

Effective landfill diversion techniques continue to deliver RECYCLED, RECOVERED AND TO LANDFILL
gains, resulting in waste to landfill falling to a new low of Recycling Recovery Landfill
0.9% of all waste produced. 100%

90%
80%
Almost 90% of waste was recycled in 2016. Vehicle 70%
manufacturers also reduced waste to landfill per vehicle by 60%
33.7% year on year. 50%
40%
30%
One of the contributing factors to this achievement is a 20%
continued close cooperation between VMs and suppliers to 10%
reuse and recycle parts packaging (Chart 4, right). 0%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
BY 2016, THE FOLLOWING 10 SIGNATORIES WERE ZERO TO LANDFILL

UK
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2002 2007 2010 2012 2015 2016
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VOLATILE ORGANIC COMPOUNDS (VOCS) MICHELIN DRASTICALLY REDUCED

VMs have invested heavily in the most efficient paint shops, which SOLVENT EMISSIONS
enable them to comply and go beyond the strict legal requirement
Michelin invested heavily in the production and
of limiting Volatile Organic Compounds (VOC) emissions.
remanufacturing process at its Stoke-on-Trent factory to
reduce emissions from the solvent-based rubber solution
In 2016, VOC from painting cars declined by 4.2% year on year,
used to coat tyres. The production line was upgraded to
while for vans it rose marginally by 0.5% (Chart 5, below).
enable tyre production without the main solvent-based
Both car and van values are well below the legal limit.
rubber solution process. Also both remanufacturing
processes at the site were integrated into the new
CHART 5 | VM VOC EMISSIONS: CARS AND VANS production line. Consequently, in 2016 absolute solvent
use and mass emissions were reduced by almost 95% in
100 comparison with the 2011 performance.
Cars VOC (g/m2) Vans VOC (g/m2)
80
-13.6%
60
0.5%
g/m 2
-38.1%
40
-4.2%
20
0
2000 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16
PRODUCTION
DIGITALISATION OF MANUFACTURING
Digital technology in the form of the personal computer and the internet has already transformed the way we live
and work. The ubiquitous use of computing has caused the rapid development of the digital economy.
REDUCED INCREASED MACHINE TIME TO

PARTS PRODUCTIVITY DOWNTIME MARKET
INVENTORY BY UP TO REDUCED REDUCED
BY UP TO
30% 5% BY UP TO
40%
BY UP TO
30%
BENEFIT TO BENEFIT TO BENEFIT TO TOTAL CUMULATIVE

SUPPLIERS VEHICLE WIDER ECONOMY ECONOMIC BENEFIT
£2.6 billion £1.7billion

MANUFACTURERS BY 2035
£4.3 billion £74 billion
To remain competitive, the automotive industry has to rapidly immediately assess the impact of traffic disruption on the
adapt to growing trends with the digitalisation production schedule. From the supply chain’s perspective,
of manufacturing (also referred to as ‘Industry 4.0’) playing having greater visibility of changes in customer demand
a critical role. Digitalisation, alongside automation has will enable improved scheduling, reduced downtime and
also been identified by the materiality assessment as overtime, as well as reduced component inventory.
one of the most important areas for the sector from the
external stakeholders’ perspective, due to its impact on To ensure that UK automotive enjoys the full benefits
manufacturing-related jobs. However, it can be reasonably of digitalisation, the government needs to put this
assumed that as new job roles are created as a result of technological change at the heart of the Industrial Strategy.
digitalisation, a growing number of students will begin to
INDUSTRIAL STRATEGY
specialise in topics that will enable them to secure those jobs,
The government published a consultation on industrial
while those already employed in manufacturing will retrain.
strategy in January 2017. This recommitment to industrial
strategy is strongly welcomed by the automotive sector. If
In 2016, SMMT published The Digitalisation of the UK the UK is to retain its position as one of the leading locations
Automotive Industry. It showed that if UK automotive in the world for automotive manufacturing, industrial
continues to embrace digital manufacturing, leading to strategy must provide a long-term vision and build upon
fully digital vehicle manufacturing factories (in addition to the partnership approach the automotive sector currently
digitalisation of the supply chain), there could be £8.6 billion enjoys through an automotive sector deal. It should also
value added to the UK economy every year up to 2035. The prioritise science, research and innovation, developing skills,
next step in the digitalisation of automotive production will upgrading infrastructure, supporting businesses to start and
be to connect vehicle manufacturers with their supply chains grow, encouraging trade and inward investment, delivering
– for example, to monitor supply deliveries in real time and affordable energy and regional/local measures.
BREXIT The automotive sector therefore wants the UK to:

The UK’s withdrawal from the European Union (EU) is likely ■ Retain the benefits of the single market and secure tariff and customs free
to have a significant impact on automotive manufacturing. automotive trade with the EU;
The automotive sector is a highly integrated global industry ■ Guarantee regulatory certainty through harmonisation of product regulation
and has built its success on favourable trading conditions and type approval;
resulting from the UK’s membership of the single market.
■ Ensure that UK automotive has unrestricted and reciprocal access to
This has allowed UK automotive to trade freely across
EU talent;
the EU without incurring the cost of tariff and non-tariff
■ Secure the full accumulation of UK and EU content for the purposes of free-
barriers or customs checks; access talent from right
across the continent; and enjoy preferential trading terms trade deals, including with the EU; and
with numerous global markets through EU free trade ■ Secure the closest possible long-term relationship between the UK and the EU.
agreements. The introduction of new barriers to trade ■ Manage the transition from EU membership to a new trading relationship
with the EU risks undermining the competitiveness of the by continuing existing trading arrangements with the EU and third country
automotive sector. markets in the event of no deal being agreed.
PRODUCTION: SMALL VOLUME MANUFACTURERS
SMALL VOLUME MANUFACTURERS

SMMT welcomes two new small volume manufacturers (SVMs) as signatories to the report this year; Lotus and
McLaren Automotive, which, along with Aston Martin, represent a distinctive element of the UK automotive sector.
low volumes and often complex construction, they have

delivered a year-on-year improvement above those seen
by the volume manufacturers.
Although signatories have seen impressive net growth in

output and economic metrics, they still face considerable
pressure to remain competitive and grow further. Key
concerns for SVMs are around the need to meet ever stricter
regulatory requirements across the globe. While they may be
luxury brands, they are still small businesses and typically
have fewer employees to manage and implement the
changing global regulatory landscape.
SVMs are particularly concerned by a future outside the EU

and a loss of influence in shaping forthcoming regulations.
This comes with the risk of policymakers not taking into
The UK has the largest number of small volume producers in account that SVM products often have far less impact on the
the world, making a diverse array of vehicle types from sports environment or in accident statistics as they are sold in such
cars to limousines. The three SVM signatories are all sports low numbers and typically drive lower annual mileages than
and luxury car producers, and iconic global brands. Even more mainstream vehicles.
though they are made in small numbers, they are exported to
markets across the globe. SVMs would greatly benefit from greater harmonisation
of global technical standards, having suitable lead times
These SVMs each produce less than 10,000 units per to implement new regulations and requirements, which
annum, yet they are significant contributors to jobs, are proportional to their economic and technical potential.
the manufacturing base and the overall economy in the Because companies such as the three SVM signatories often
UK. Both Aston Martin and McLaren Automotive have have to compete in the global marketplace, but only have
announced multimillion pound investments in new plants a small number and limited portfolio of models in which to
in the UK. While their environmental performance per recoup any investment, measures to support the sector
vehicle might be high in absolute terms, reflective of their would be most welcome.
SVM KPIs
This year, with the additional two new signatories, we are able to showcase the SVM consolidated environmental performance.
The KPIs displayed below show a very positive year-on-year trend, thanks to continued technical and operational improvements
as well as an increase in production volumes. Only absolute water use increased, and only marginally.
2015 2016 % change 2016 on 2015
Production (tonnes) 4,729 6,888 45.7%
Production inputs
Total combined energy use (MWh) 83,011 81,536 -1.8%
Energy used/output (per tonne shipped) (MWh/unit) 17.55 11.84 -32.6%
Total combined water use (000m 3) 71 72 1.3%
Water use per vehicle produced (m 3 /unit) 15.0 10.4 -30.5%
Material outputs
Total combined CO 2 equivalents (tonnes) 25,722 25,544 -0.7%
CO 2 equivalents per vehicle produced (tonnes/unit) 5.44 3.71 -31.8%
Total combined waste to landfill (tonnes) 6 4 -41.7%
Waste to landfill per vehicle produced (kg/unit) 1.3 0.5 -60.0%
PRODUCTION: AUTOMOTIVE SUPPLY CHAIN
AUTOMOTIVE SUPPLY CHAIN

The automotive industry is reliant on fully integrated supply chains. Record high automotive production levels
have benefited the supply chain, but they also would not be possible without a highly efficient and dynamic
components production and delivery system. The future of both manufacturers and suppliers is interdependent
and the uncertainty of a future outside the EU also challenges supply chain sustainability.
SUPPLY CHAIN KPIs

In 2016, ATP, a remanufacturing company, became a new
signatory to the report, increasing the diversity of participating
companies. This report has 11 supply chain signatories
representing a wide range of activities, from component
production to freight and remanufacturing.
The overall activity level expressed as weight of product

produced has dropped year on year. One of the signatories
reported closing one of its plants in 2016, which affected the
overall year-on-year comparison. One signatory reported using
more lightweight materials. Signatories’ efficiency in terms of
production input and output improved in both absolute and
relative terms. Only relative water use increased.
This positive performance can be partially attributed to a

long-term close cooperation between vehicle manufacturers
and the supply chain, including small and medium-sized
enterprises (SMEs), in building a robust UK supply chain
capable of competing globally.
An important part of those efforts is ensuring that effective

management practices deliver environmental benefits by
reducing resource consumption and delivering cost savings.
One of the ways of facilitating this is by setting up a minimum
environmental requirement suppliers contracts. Out of
28 signatories to this report, 13 require an environmental
management standard from their suppliers (e.g. ISO14001)
and 16 engage with UK suppliers to improve efficiency.
SUPPLY CHAIN PRODUCERS’ ECONOMIC AND ENVIRONMENTAL PERFORMANCE

2015 2016 % change 2016 on 2015
Output (weight of product shipped) (tonnes) 575,888 533,033 -7.4%
Production inputs
Total combined energy use (GWh) 548.3 478.3 -12.8%
Energy used/output (per tonne shipped) (MWh/tonne) 0.95 0.90 -5.8%
Total combined water use (000m 3) 589 580 -1.6%
Water use/output (per tonne shipped) (m 3 /tonne) 1.0 1.1 6.3%
Material outputs
Total combined CO 2 equivalents (tonnes) 162,136 143,775 -11.3%
CO 2 equivalents/output (per tonne shipped) (tonnes/tonne) 0.28 0.27 -4.2%
Total combined waste to landfill (tonnes) 766 708 -7.6%
Waste to landfill/output (per tonne shipped) (kg/tonne) 1.3 1.3 -0.1%
Data from logistics companies is not included in the table above (to focus on producers of automotive components and so enable per/unit of output comparisons).
One signatory left SMMT membership and therefore is no longer a participant in this report.
PRODUCTION: UK SUPPLY CHAIN
UK SUPPLY CHAIN
2016 was generally a positive, albeit mixed, year. Many long-term negotiations came to fruition, bringing
substantial investment from large global tier one suppliers to address gaps in the UK supply chain.
These multimillion pound, long-term investments were of Brexit outcomes. And with recent vehicle manufacture
in line with the trend of recent years set by UK vehicle commitments to the UK, the sourcing opportunity is arguably
manufacturers, demonstrating the competitiveness of the largest the UK supply chain has ever seen. Alongside
component manufacture and assembly in the UK. domestic activity, a weaker pound provides new export
opportunities some of which have already been captured,
These results highlight the progress made by SMMT and other helping to address the UK-EU trade deficit.
key stakeholders in promoting the value of doing business
in the UK. Further improvements in the supply chain will be One key growth area to explore is in digitalisation of
possible with support from government as part of the Industrial manufacturing. The recently published KPMG and SMMT
Strategy. To date, cross-sector and government collaboration report on the matter highlighted 30% of the economic benefit
has worked very well, supporting an increase in UK-made generated by the sector would be driven by suppliers. There is
content from 36% in 2011 to 41% in 2015.1 a clear opportunity for UK suppliers to leverage productivity
from investment in these technologies, enabling global
There is no doubt this positive momentum has been affected competitiveness and the capture of opportunities both at
by Brexit. While various multimillion pound investments home and abroad.
from tier one suppliers and vehicle manufacturers have been
welcome, uncertainty has meant some investment decisions In addition to new ways of manufacturing products, a new
may have been put on hold, potentially threatening the long- generation of products will also bring their own wave of
term development of the UK’s supply chain. opportunity. With sales of ultra-low emission vehicles
(ULEVs) accelerating globally, the UK will look to maintain and
In addition to the uncertainty, Brexit raises issues around develop its current competitive advantage in key strategic
customs, tariffs and the movement of parts, particularly technologies and capitalise on the resulting supply chain
for the supply chain. The current supply chain is a deeply opportunities. Similarly, the proliferation of connected and
embedded, complex, cross European network, with crossing autonomous vehicle technologies will bring opportunities for
borders multiple times through the assembly process. A new entrants to suppliers looking to increase and diversify
reversion to World Trade Organisation (WTO) tariffs and their range of products and services.
implementation of full customs checks at UK borders will
have a significant impact on end-user costs. With events such as the recently launched
Automechanika Birmingham, suppliers now have an
That said, the opportunity for UK suppliers is still very clear. opportunity to showcase their capabilities to a domestic
With post-Brexit investments continuing to come to the UK and international audience.
from vehicle manufacturers, including Nissan, Jaguar Land More than 550 exhibitors and 12,000 visitors took part in the
Rover, Toyota Manufactuting (UK) and McLaren Automotive, 2016 launch and the 2017 show is expected to have been 70%
suppliers have a significant sourcing opportunity to aim at. bigger. With SMMT bringing events like Meet the Buyer and
The reshoring opportunity for the upstream supply chain, Open Forum to the show, SMMT continues to drive the reshoring
estimated at £2 billion annually, in addition to the £4 billion2 conversation and provide opportunities for buyers and suppliers
opportunity for tier ones, should be realised regardless to link up and develop new business. n
GKN SUPPORTS FORMULA STUDENT

KN is an official partner of Formula
G
Student, which is aimed at supporting the
next generation of young engineers. Run by
the Institution of Mechanical Engineers, it
is the world’s largest student motorsport
competition, challenging engineering students
from across the globe to design, build and race
their own Formula One-style racing car.
In 2016, GKN broadcast live from across the four
days of Formula Student, while a digital campaign
reached more than 1.5 million people via social
media. GKN also offered free parts to 60 teams
across the world for use on their racing cars. See
more at www.gkn.com/formulatstudent
PEOPLE
UK automotive has a talented and dynamic workforce, characteristics which have been a key factor in its recent
successes. This was reflected in the materiality assessment, which identified human capital as a key area to the sector and
external stakeholders. To ensure continued growth, there is a need to maintain and build upon these strengths through
a holistic approach to skills, delivered through a comprehensive and long-term skills strategy. Such a strategy should
focus upon: increasing the take-up of automotive careers; the training, upskilling and retention of people in work; and
addressing the skills challenges posed by new technologies and demographic trends (such as the ageing workforce).
The introduction of the Apprenticeship Levy has focussed attention on apprenticeships, which industry welcomes, as long
as alternative routes into automotive careers are also developed and well communicated. The innovation agenda is also
a priority, with digitalisation of manufacturing and new technologies such as connected, autonomous and alternatively
fuelled vehicles presenting both a skills challenge and an opportunity. It is important that the sector’s talent pool is primed
for the introduction of these technologies, allowing the UK to remain in the vanguard of future development.
EMPLOYMENT TRAINING
The growth of the sector has been reflected in an 11.9% A continued upskilling of its workforce enables the industry
to stay competitive and prepare for future challenges. The
increase in employment reported by signatories, which
number of formal training days per employee reported by
reached 109,890 employees in 2016. Signatories reported
signatories increased in 2016 by 9.1%, from 2.7 to 2.9 days.
that around 18% of the workforce in 2016 were agency This is in addition to informal training such as e-learning,
workers, up from 16% the year before. In line with increased toolbox talks and mentoring, which is not officially
industry growth, the number of jobs dependent on the measured. Signatories also reported their staff achieving
automotive sector in the UK remained stable at 814,000 in 549 nationally recognised qualifications.
2016, with direct employment in automotive manufacturing In 2016, more than 870 new apprentices were taken on and
jobs also stable at 169,000. almost 800 were retained by signatories.
On many occasions, the report’s signatories are the main

STAFF TURNOVER employer in the region they operate in and have strong links
The automotive industry remained an attractive employer with with local communities, sometimes with several generations
a high retention rate. This was reflected in a low staff turnover of one family working for the same employer. Therefore,
which dropped in 2016 to 5% from 7% the year before. it is particularly important to businesses to maintain
engagement and attract local talent.
HEALTH AND SAFETY
BENTLEY PARTNERS WITH NEW TECHNICAL COLLEGE
The safety performance of automotive production processes
rewe Engineering and Design University Technical College
C
improved significantly over the year thanks to investment
(UTC) opened its doors to students in September 2016.
in training and technical advances. The number of lost time Bentley and other industry partners have been working to
incidents dropped in 2016 by 0.5% to 1.9 per 1,000 employees deliver the college for 14-18 year olds. Bentley is designing
(Chart 6, below). Increasing automation of production real-world projects for students to work on, as well as
processes is expected to bring further safety gains. offering behind-the-scenes access and the opportunity
Furthermore, a new standard ISO 45001 on occupational to learn from Bentley designers and engineers. The
partnership with the UTC builds on Bentley’s application
health and safety management systems is currently being
of the dual-education model applied at its Apprenticeship
developed, which will further improve employees’ safety.
Training Centre also in Crewe and will help provide a pipeline
of local talent for the future.
CHART 6 | LOST TIME ACCIDENTS, 2002-2016
800 16
Total of lost-time incidents Number of lost time incidents per '000 employees
Lost-time incidents per 1,000 employees
600 12
Lost-time incidents
400 8
200 4
0 0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
PEOPLE
CHARITABLE DONATIONS business. Through SMMT hosted meetings, and with an input
In 2016, signatories reported cash donations to charities of from business organisations such as the CBI, our members
more than £8.3 million and made other contributions worth share best practices principles to ensure the industry is
more than £4.1 million. Signatories also reported giving in doing all it can to remove modern slavery practices from the
excess of 180,000 hours of employees’ time to local causes. automotive supply chain.
SUSTAINABLE SOURCING AGEING POPULATION

As part of its corporate social responsibility, the automotive People in the UK and around the world are living longer than
industry also looks beyond its own operations, working before. In mid-2014, the average age in the UK exceeded 40
closely with and monitoring its supply chain performance. years for the first time. By 2040, nearly one in seven people
The industry’s primary focus is on building capability among are projected to be over 75 years old. 3 As a result we need to
suppliers to improve environmental performance, meet legal adapt how we live, commute and work. The significance of
requirements and promote sound working conditions in
this trend was identified during the materiality assessment
their own facilities and those of their suppliers. A number of
conducted by SMMT earlier this year.
OEMs uses the Carbon Disclosure Project (CDP) supply chain
As the population ages so does the workforce. All
programme to identify and manage risk in the supply chain.
employers, including the manufacturing sector, need to
plan for the future to enable their employees to work for
ETHICAL SOURCING: MODERN SLAVERY
longer in a productive way. This involves removing barriers
In response to the Modern Slavery Act in 2015, the UK
to remaining in work, catering to different health needs,
automotive sector has taken an active role in supporting
adjusting workplace design and encouraging access to
government ambitions to prevent modern slavery and
new technologies. On some occasions, this would involve
human trafficking in business and supply chains. The
industry has led the way in being among the first to publish retraining staff to undertake less physically demanding
publicly accessible modern slavery statements on company tasks or using collaborative robots (cobots). Also, further
websites as soon as reasonably practicable after the end of digitalisation and automation of automotive production
each financial year. Recognising the increased importance processes will most likely result in moving away from
the government has placed on the issue by setting up the manual labour to digital process control. n
first ever government taskforce on modern slavery, the
industry has also taken steps to commit to ensuring modern TOYOTA UK STEM PROMOTION FOR
slavery practices do not take part in any part of a company’s YOUNG PEOPLE IN EDUCATION
Toyota’s vehicle manufacturing facility in Derby is within a “social
ASTON MARTIN SUPPORTING THE COMMUNITY mobility cold-spot”, with many young people from second or
Aston Martin is partnering with a number of local and third generation non-working families.
national charities. In February 2016, following the Toyota’s educational support programmes see young people
successful launch of the 24th James Bond film, Spectre, travel along a journey of STEM (Science, Technology, Engineering
Aston Martin auctioned one of the DB10s used in the film at and Mathematics) inspiration. This journey starts at primary
a special event at Christies. This extremely rare model was school with the Art of Manufacturing, seeing the world of
sold for £2,434,500. manufacturing within a stimulating and safe environment.
This was the only Aston Martin DB10 to be made available At secondary school, students can join the Industrial Cadets
for public sale, with only 10 models produced in total. programme and have a one-week work experiential placement
The money raised by the auction was donated to Doctors at the Toyota factory, all designed to encourage young people to
without Borders – a global humanitarian aid organisation follow a path into a STEM based career.
that provides medical care and support to victims of armed Toyota is actively involved in supporting Derby
conflict, epidemics and other disasters. Manufacturing University Technical College and the JCB
Academy through governorship, design and active delivery
of curriculum based content. Toyota has also established its
own on-site Apprentice Academy, catering for local SMEs
and suppliers as well as Toyota’s own apprentice intake.
USE

■
Increased new vehicle uptake ■
Enhanced product offering from ■
Continuing to encourage the
■
AFV registrations up 22.2%, investment in new technologies uptake of cleaner, newer vehicles
accounting for 3.3% share ■
Attractive finance packages to address both the CO2 and air
of the market ■
Consumer uptake of new quality challenge
■
Average CO2 emission reducing powertrain technologies, helped ■
Work needed on regulations,
albeit at slower rate due to by government incentives public acceptance and workable
changes in the market structure business models to bring CAVs
■
Overall transport CO2 emissions to the market
rise as vehicle usage increase
More than 100 years ago, the first cars transformed the way people travel. This increased mobility has improved
the lives of millions of people across the world. This success story, however, also has local and global environmental
implications. The industry has invested heavily to increase the efficiency of conventionally powered vehicles, develop
alternative powertrains,and invest in future mobility including Connected and Autonomous Vehicles (CAVs). In additon, the
way in which customers access and use vehicles is changing. The industry needs to adjust its business models to adapt to
those changes in how we conceive of mobility and also address the increasing importance of data and cybersecurity.
NEW VEHICLE REGISTRATIONS

CHART 8 | AFV REGISTRATIONS
New car registrations rose for a fifth successive year in 2016,
up 2.3%, with 2.6 million units registered. The 2016 market 100,000
was 12% or almost 300,000 units above 2007’s pre-recession
Petrol/electric hybrid
total. Fleet registrations rose by 4.8% to represent 51.3% Diesel/electric hybrid
80,000
of the market total. Diesel registrations rose by 0.6% to a Other electric
(plug-in hybrid/range-extender)
record 1.285 million units, while petrol demand grew 2.7%.
Hydrogen
Number of registrations
Alternatively fuelled vehicles (AVFs) showed the greatest 60,000 Pure electric
growth – up 22.2%. However, with 88,919 units registered,
this segment still represents only 3.3% of the overall market
(Chart 7, below). Further incentives will be needed in order to 40,000
boost volumes significantly.
20,000
CHART 7 | NEW CAR REGISTRATIONS AND FUEL TYPE
0
3.0 AFV Diesel 0.035 2010 2011 2012 2013 2014 2015 2016
Petrol AFV share
2.5 0.03 the slowest rate of decline since 2004 and is well below the
3.5% averaged since 2008 (Chart 8, above). The slowdown
New car registrations – millions
0.025
2.0 in the rate of improvement most likely represents the
AFV market share
0.02
increasing challenge of delivering further technological
1.5 gains. This is also reflective of consumer demand and
0.015
VOLVO SETS AMBITIOUS EV SALES TARGET
1.0
0.01 In 2016, Volvo Cars announced it aims to see up to one
million electrified cars by 2025. The Swedish company
0.5 0.005 plans to achieve this aim by offering at least two hybrid
versions of every model in its range and releasing its first
0 0 all-electric car in 2019.
’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 15 ’16
NEW CAR CO2

UK average new car CO 2 emissions continued to decline in
2016, to just 120.1g/km. This was 33.6% below the 2000
level of 181.0g/km. However, the reduction was a relatively
modest 1.1% compared with 2.6% recorded in 2015. It was
USE
market trends, most notably a shift in vehicle segment type TRANSPORT CO2 PERFORMANCE
towards higher CO 2 emitting segments (e.g. dual purpose Road transport is one of the largest sources of CO 2
and executive) as well as a decline in diesel penetration generation, just below emissions from energy supply
(given diesels typically emit around 20% lower CO 2 than the (2015 data, Chart 9 below). 4 Although emissions from road
equivalent performance petrol-engined vehicle). transport have been cut since 2000, albeit by a modest
3.5%, they have risen in each of the past two years. The
A new car will also offer the consumer increased information recent increase corresponds to a rise in vehicle use, which
to help reduce emissions in use, for example, gear shift has begun to offset the improvements in new vehicle
indicators, trip computers and sat navs (helping reduce efficiency. This has put an increased focus on the role of
distance travelled through optimising route guidance transport in meeting the UK’s carbon reductions targets.
and avoiding congestion). New cars are lower emitting, Emissions from all cars in use have fallen by 8.9% since
safer, more reliable and more desirable than their older 2000), although they rose in 2015. 4 There was also a
counterparts. In 2016, new cars only represented around notable growth from the van sector.
8% of the 34.4 million cars in use. It is also a concern that
the average age of the car in use has increased, from 6.8 There are a number of fleet CO 2 emissions influencers,
years to 7.8 years over the past decade, which will be to the some of which are set out in the diagram below. Action can
detriment of the environmental profile of the fleet. be taken on a broad number of measures to help reduce
emissions. This could include measures to reduce the need
CHART 9 | CO2 EMISSIONS BY SOURCE to travel at all such as using electronic communications, or
choosing the right mode of transport and, ensuring vehicles
are well-maintained and well driven. A poorly maintained
Other vehicle can emit as much as 50% more CO 2 , while eco-driving
Sources Other techniques can reduce emissions by 5-15%. 5
4.1% Cars road Other
17% transport Transport
2.1%
Further information on vehicle
10.4%
environmental performance
can be found in SMMT’s
Residential
15.7% New Car CO 2 Report 2017
www.smmt.co.uk/co2report.
Energy supply
33.8%
Business
17%
TACKLING FLEET CO2 EMISSIONS – STAKEHOLDERS AND THEIR ROLES
Regulations
Technological progress
AUTO Fiscal measures
Driver aids INDUSTRY GOVERNMENT
AND Infrastructure
Information REGULATORS
Information
Media – info/advice
Journey/modal/vehicle choice
Local Authorities OTHERS
Driving style
– parking rules, congestion or CONSUMERS
Vehicle maintenance
clean air zones
USE
AIR QUALITY
The automotive industry recognises its part in the air quality air quality (because long-distance diesel drivers often use
challenge, as underlined by the findings of SMMT’s materiality motorways which are not typically in urban areas). However, it
assessment, which scored air quality as one of the most would have an adverse impact on CO 2 performance.
important issues for the industry and external stakeholders.
It is investing billions of pounds to engineer and produce the While advanced Euro 6 technology will deliver great
cleanest, lowest emitting vehicles in history. improvements, it cannot solve the air quality problem on its
Industry takes tackling air quality pollutants very seriously own. In addition, policymakers must encourage consumers
and looks to the latest Euro standards (setting maximum to purchase these latest low-emission vehicles and
levels that a vehicle can emit) and the introduction of the implement measures to tackle congestion in urban areas.
additional Real Driving Emissions (RDE) test to help them Air pollution is a local issue, and so needs local solutions,
deliver on air quality targets and help ensure confidence in but these must be guided by central government to ensure a
the on-the-road environmental performance of new vehicles. coordinated and consistent approach.
At the same time there will be a new test cycle introduced for
The UK government has recently published its National Air
CHART 10 | NOx AND PM2.5 EMISSIONS Quality Action plan. Clean Air Zones will be implemented in
a variety of cities and the plan includes a consultation on
100
proposals to address air quality issues in the areas impacted
90 by these issues.
80 New vehicles fitted with the latest technologies, will

contribute towards improving the environmental profile of the
Indexed: 2000 = 100
70 fleet. Almost 30 million out of 34.4 million cars in use on the

UK roads are pre-Euro 6. Increasing fleet renewal will help
60
improve the environmental profile of the fleet. As with fuel
Cars NOx
50 Road Transport NOx consumption, driver behaviour can influence the amount of
All NOx fuel used and so pollutant emissions. Industry, alongside the
Cars PM2.5
40 Road Transport PM 2.5 Automotive Council, is working to ensure driver efficiency can
All PM 2.5
be improved and help contribute to reducing emissions.
30
2000 2005 2010 2014
With the reduction in exhaust particulate emissions, the
relative contribution of other sources of particulates has
new vehicle types from which CO2 figures are derived – the become more significant. Non-exhaust particulate emissions
World Light vehicle Test Procedure (WLTP). from brake and tyre wear are now being researched by
National figures, published by the Department for Transport, industry and health experts within the remit of the United
show NOx and PM2.5 (Particulate matter less than 2.5 Nations in order to better understand their contribution to
micrometres in diameter) (both NOx and PM 2.5 are connected air quality and to evaluate the health impacts.
to respiratory problems; https://www.gov.uk/government/
statistics/emissions-of-air-pollutants) emissions from road VOLKSWAGEN ENTERS NEW PARTNERSHIP
transport and, in particular, cars, fell between 2000 and 2014 WITH ZIPCAR
(see Chart 10). In 2014, road transport accounted for 31.6% of In 2016, Volkswagen joined forces with the world’s
all NOx emissions, with cars accounting for 15.7%. For PM2.5 largest car-sharing network, Zipcar, to launch the
the figures were 13.6% and 3% respectively. Since 2000, ultra-low emission Golf GTE in London. They put 40 cars
NOx emissions from cars have fallen by 62.8% and PM2.5 into central London and a further 10 cars throughout
emissions 6 by 52.7%. However, at a local level, concerns are the rest of the capital, with dedicated charging stations
be much more acute and the need for action more pronounced. for Zipcar members. More are due to follow in late 2017.
Under the latest Euro 6 standards, the NOx emissions of a The partnership allows members of the car club access
petrol and diesel car are at their lowest ever levels and are to low- and zero-emission driving vehicles for as little
approaching parity - 60mg/km for petrol and 80mg/km for as £7 per hour.
diesel (limits for previous Euro 5 diesel were 180mg/km).
This should help reduce concerns over the air quality impact
of new diesel cars. New diesel cars should continue to be
used as an important part of the solution to reducing CO 2
emissions. It would also safeguard the UK’s (and Europe’s)
position as a key developer and manufacturer of diesel
technologies. Diesels still play an important role for the right
user, notably those travelling long distances or with heavy
loads. Converting such users to petrol may not improve urban
USE
ALTERNATIVELY FUELLED BUSES

The number of alternatively fuelled buses on UK roads grew an operator to a route, requires the vehicle to meet certain
to 3,700 in 2016, accounting for 4.2% of bus parc (Chart 11). standards, including those relating to the environment.
Almost 90% of them are diesel-electric and 4.8% full electric. Buses are one of the key components to solving the air
The UK bus market has already seen the emergence of quality issues in urban areas. Real world tests using the
a variety of lower-carbon technologies – notably hybrid London 159 bus route equipped with Euro VI technology
and pure electric powertrains with the use of biofuels and show a 95% drop in NOx compared with previous generation
Euro V buses. Consequently, if every older bus operating
CHART 11 | ALTERNATIVELY FUELLED BUS in the capital was replaced with a Euro VI version, total
REGISTRATIONS NOx emissions in London would fall by 7.5%.7 Therefore, it
1000 is important that these policies pull in a common direction
rather than create a patchwork of differing requirements,
Electric which make it difficult for manufacturers and operators
800 Diesel/electric to plan and bring to market effective solutions. Broader
CNG policy considerations, including better planning and suitable
New registrations
Cumulative total
600 Alcohol
Cumulative parc infrastructure provision, could also help ensure modal and
technological shifts can be delivered.
400
A Euro-VI bus emits
200
95% less NOx
on the road than a
0
’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 Euro-V bus
Source: Transport for London
hydrogen. Efficient diesels, using mild-hybrid systems for the

ancillaries (rather than to drive the vehicle) can also be effective
in reducing the overall emissions associated with bus use.
Most buses run on prescribed routes in urban areas and with
dedicated depots, and they more easily lend themselves to using
alternative fuels than many other vehicle types.
Unlike cars and vans, buses and coaches do not face
tailpipe CO 2 regulations, but are often regulated by the
local authority or city which as part of the appointment of
OPTARE IMPROVES
PRODUCTION EFFICIENCY
Optare identified a host of measures to
improve its manufacturing efficiency, which
will also reduce annual expenditure on
energy and fuels by 18.5%. Subsequently in
2016 Optare completely changed production
warehouse lighting and office lighting to
energy saving LEDs. Monitoring and targeting
software was installed, offering step-by-step
control which should help the company shave
another 5% from its use. This means that
processes can be monitored and targeted
for improvement, through engineering and
improved tooling solutions. Optare is also
working with paint suppliers to find solutions
to further reduce its bake cycle/cure time
to make savings on gas use, while still
ensuring its low Volatile Organic Compounds
emissions remain unaffected. In 2017, there
are plans to install fast action automatic
roller shutter doors to contain warmth and
reduce gas heating usage further.
USE
ALTERNATIVE FUELS
JAGUAR I-PACE CONCEPT CAR
Sustainable biofuels form a part of the solution to reducing
Last year, Jaguar announced the I-PACE concept car,
CO 2 emissions and some pollutant emissions, including
its first electric sport utility vehicle (SUV). The I-PACE
particulate matters. Currently petrol and diesel fuels sold
will have a range from a single charge of 310 miles, and
in the UK already contain biofuels. E5 allows for up to 5%
will be able to accelerate from 0-62mph in about four
of petrol to consist of ethanol and B7 allows for up to 7%
seconds. The all-wheel-drive I-Pace will use a pair of
of diesel fuel to be biodiesel. The UK is also considering the
electric motors that will produce close to 400bhp and
introduction of E10, and all petrol cars now sold are designed
516lb ft of torque, all powered by a 90 kWh lithium-ion
to run on this fuel (provided it meets the appropriate fuel
battery pack.
specification and quality standards). Natural gas (both in
As part of its electrification plan, Jaguar has gone
compressed and liquid forms) is also used in trucks and
back to racing in the Formula E all-electric series. This
bus applications, resulting in improvements in air quality
provides Jaguar with an exciting test-bed for battery and
pollutant emissions. For all fuels, it is essential that the
electrification technology, and a developing pipeline of
quality is correct, to avoid any issues which impede the
learning for its electrification strategy.
normal operation of the vehicle and negatively impact the
introduction of such fuels.
ELECTRIC VEHICLES INFRASTRUCTURE

The number of electric vehicle (EV) charging points has been
increasing steadily in recent years (Chart 12 below). By the
end of 2016, there were 4,169 locations in the UK, with a
total of 11,605 charging points available. This represents
almost an eight fold increase since 2011, when 1,537
charging points were available.
CHART 12 | C
HARGING CONNECTORS BY TYPE: HYDROGEN INFRASTRUCTURE
2011-2016 In March 2017, the government announced a £23 million
fund to stimulate the infrastructure and uptake of hydrogen
12,000 vehicles. Hydrogen fuel providers will be able to bid for
funding in partnership with organisations that produce
10,000 Slow hydrogen vehicles to help build high-tech infrastructure,
Fast
Charging connectors by type
Rapid DC including fuel stations. In 2016, there were nine publicly

8,000 Rapid AC accessible Hydrogen Refuelling Stations (HRS) on UK roads.
2017 will also see an installation by Shell of three hydrogen
6,000 stations located in Cobham, Gatwick and Beaconsfield.
4,000
HYDROGEN REFUELLING STATIONS
2,000
0
’11 ’12 ’13 ’14 ’15 ’16
source: Zap-Map
While the industry welcomes this positive trend, it should

be ensured that the right infrastructure is located in the
right place. This should mean ensuring a proper UK network,
with sufficient provisions where demand is highest, and the
provision of the right type of infrastructure for example, avoid In operation
Planned
installing rapid chargers at places where vehicles might be No public access
stationary for many hours on end. Charge points in visible
places can also provide peace of mind for consumers about the
availability of recharging points, and help encourage switch-
over to EVs by removing fears over range anxiety.
However, the vast majority of EV drivers are expected to
charge at home and at their place of work, with public charging
infrastructure only used occasionally by most drivers.
USE
TOYOTA ROLLS OUT FURTHER SPECIALIST H2

ROAD SAFETY
SERVICE CENTRES IN UK The UK has one of the best road safety records in the
In 2016, Toyota won the UK government’s funding to boost world. The motor industry has a long-standing tradition of
the number of ultra-low emission vehicles on Britain’s innovation to improve vehicle safety features, which plays
roads, resulting in 20 new Toyota Mirai hydrogen fuel cell a key part in ever improving road statistics. An increasing
cars joining public and private sector fleets in the UK. number of vehicles are being sold with autonomous safety
Toyota is supporting the roll-out of hydrogen-fuelled technology such as autonomous emergency breaking or
vehicles in the UK with the provision of specialist collision warning systems installed as standard or available
service centres for the Mirai model at additional as an option. Further future implementation of CAVs onto
locations across the country. UK roads is expected to bring additional safety advances.
From 2016, centres in London, Swindon, Sheffield, However, in the anticipated lengthy transitional period, there
Swansea and Aberdeen have been helping to extend will be a mixed fleet of CAVs and manually driven vehicles
the reach of the technology, in line with the national H2 and managing their interaction will be critical.
infrastructure network plan.
CHART 13 | NUMBER OF CASUALTIES
vs DISTANCE DRIVEN
350 1200
All casualties Casulty rate per billion vehicle miles
300 1100
Casualty rate per billion vehicle miles

250 1000
All casualties (,000)
200 900
150 800
100 700
HONDA CLARITY FUEL CELL ARRIVES IN UK

50 600
The first examples of the Clarity Fuel Cell, Honda’s
most advanced zero emissions vehicle, arrived in Europe
0 500
in 2016. The first six vehicles have been based with ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15
customers in London and Copenhagen as part of the
Hydrogen for Innovative Vehicles (HyFIVE) demonstration Since 2000, the overall number of UK road casualties has
project, partly funded by the Fuel Cell and Hydrogen dropped by 42%8 and the casualty rate per distance driven
Joint Undertaking (FCHJU). reduced by more than 46%. This was achieved despite an
The new Clarity Fuel Cell features Honda’s latest increase in distance driven of 9.3% in the same period. Also
technological enhancements in the field. It is the first fuel
there were 6.3% fewer casualties per mile driven between 2014-
cell sedan to house the entire stack underneath the bonnet,
15 (Chart 13 above). The automotive industry has contributed
making the cabin spacious enough to carry five occupants.
significantly to initiatives for safer use of roads and through
A recent US Environment Protection Agency (EPA) test
continuous improvements in the active and passive measures
measured an effective range of 366 miles (589km).
to ensure occupant and other road users’ safety.
FUTURE MOBILITY/SHARED MOBILITY

In the past few years a new phenomenon of sharing mobility
has started to emerge, notably in larger cities, where private
vehicles are underused due to high congestion. In those
circumstances public transport is mainly used for the weekly
commute and private vehicles driven during weekends only.
Consequently some people fulfil their individual mobility
needs by using car clubs, ride share or ride-hailing apps. This
trend is expected to lead to decreasing private ownership
levels, which would create a radical departure from the
traditional automotive business model. Offering integrated
connectivity solutions and the flexibility of sharing cars
presents future opportunities and has already been
embraced by some vehicle manufacturers.
USE
UK SOCIAL AND ECONOMIC IMPACT OF CONNECTED AND AUTONOMOUS VEHICLES
£51 billion 1 million 320,000

Value added annually more people with access Additional jobs created
(at 2014 prices) to further education
25,000
Jobs in automotive
Top 5 benefits
of CAVs
6/10 people* manufacturing created
with limited mobility will have
• Reduced stress of driving
• Ability to rest on longer
an improved quality of life
*when surveyed 25,000
journeys Serious accidents prevented
• Fewer accidents
• Lower insurance costs
• Ability to travel at 2,500
preferred times Lives saved
source: SMMT Digitalisation of Manufacturing
CONNECTED AND AUTONOMOUS VEHICLES (CAVs) Data protection and vehicle cybersecurity are also areas of
SMMT’s materiality assessment identified future mobility key focus for the industry. The EU General Data Protection
as another key issue for the industry and its stakeholders. Regulation (GDPR) was approved in April 2016 and will come
Currently, a new generation of vehicles, which are connected into effect in all member states two years after this date.
and increasingly autonomous, is emerging. This technological The new legislation makes personal data exchange more
revolution will change how our society functions, improving challenging owing to its new requirements and hefty fines for
safety and efficiency and reducing congestion and emissions. breaches. The UNECE, meanwhile, is seeking to draw up a set
While some vehicles already feature some connected or of high-level guidelines for vehicle cybersecurity.
autonomous technologies, the industry has already begun See SMMT video on connectivity:
testing prototype fully self-driving vehicles on UK roads. https://www.youtube.com/watch?v=w4tNEQFqW0g
By operating at optimised speeds, reducing gaps between

VAUXHALL ONSTAR
vehicles on the move, route optimisation, greater vehicle use
Connectivity will play an ever-increasing role in the
and reduced congestion, CO2 emissions could be significantly
industry and Vauxhall’s emergency response, personal
cut, as well as journey times shortened – both in the order
online and service assistant OnStar continues to go from
of 20%. For details see the SMMT report: Connected and
strength to strength, recording more than 11 million
Autonomous Vehicles; revolutionising mobility in society.
customer interactions in Europe since its launch in 2015.
The OnStar Command Centre is based at Vauxhall’s HQ in
In order to realise the full benefit of CAVs the entire ecosystem
Luton, and in 2016 the service was expanded into 18 new
will need to be joined up. The challenges of sharing data
markets and picked up several industry and technology
will need to be overcome in order to create new or improved awards including the UK “Car Tech Awards” where the
services and enable decision making based on real-time New Astra won “Tech Car of the Year” for “Best Safety
information. Interoperability, standardisation of data formats, Innovation” for OnStar.”
exchange protocols and data quality still need to be agreed. By
creating a truly Intelligent Transport System, vehicles will be
able to deliver informed and efficient mobility for all users.
The government must develop a clear and joined-up national

strategy for making the UK a global centre of excellence in
relation to CAVs, based on a thorough understanding of UK
strengths and competencies. The strategy should articulate in
very clear terms how the UK could leverage the outcomes of
the publicly funded CAV projects and testbed ecosystem, set
out plans to create the conditions (e.g. national infrastructure,
R&D capabilities, skills and finance opportunities) that will
make the UK attractive for CAV investment, and prioritise
developing a pipeline of highly skilled engineering talent from
non-traditional automotive engineering backgrounds.
END-OF-LIFE VEHICLES (ELVs)

■
The industry met the 2015 target ■
Continued co-operation with ■
Illegal operators and their lack
for 95% of a vehicle (by weight) to regulators and recycling industry. of enforcement undermine the
be recovered. legitimate operations.
■
Changing metal prices impact
profit margins of ELV processing.
The end of life stage of a vehicle's life cycle is taken into account at the design stage, when the recyclability and
recoverability of vehicles is ensured. Consequently, components can be reused and remanufactured to extend their natural
life. Also materials coming out of vehicle shredding operations can be recycled and used to produce vehicles and other
products. This ensures the optimal resource preservation and aligns with circular economy principles.
Industry calls upon government to increase the enforcement

of the ELV requirement to root out non-compliance, ensuring
that the UK meets its obligations with regards to the reuse,
recycling or recovery of ELVs.
While there are no official figures, industry analysis has
shown that every year there is a large percentage of ELVs,
believed to have been scrapped but which are unaccounted
for. The likelihood is that they have been unofficially
scrapped, while being marked as “disposed into trade”. To
address this issue, industry has entered into discussions
with Defra and DVLA to try to eliminate alternative ways of
scrapping an ELV other than via a CoD, and would welcome
further government effort to expedite this matter.
PRODUCER RESPONSIBILITY
AVERAGE VEHICLE AGE
When a vehicle reaches the end of its life it must be
disposed of in an environmentally responsible way Vehicles are designed to meet recyclability criteria but also
through an Authorised Treatment Facility (ATF). Vehicle to be durable and longlasting. The average age of vehicles
manufacturers (VMs), through the End of Life Vehicles at scrappage continues to increase and reached 14.1 years
Directive, have an obligation to provide free take-back for in 2016. This is now on a par with the average vehicle life
cars and light commercial vehicles across the UK. VMs in 2003. The lowest vehicle scrappage age was recorded in
have appointed Autogreen and Cartakeback to accept 2009, when the scrappage scheme took place. See Chart 14
vehicles that have reached the end of their life and issue the below for details.
Certificate of Destruction (CoD). A similar upward, but more gradual, trend can be observed in
In line with the EU target, vehicle manufacturers’ approved the average parc age, which in 2016 reached 7.83 years.
networks of ATFs have achieved 85% reuse and recovery
of materials from ELVs each year from 2006, when the This indicates a slower fleet renewal, which as indicated
requirement came into force. Also since 2015, the industry earlier in the report means that the environmental and
has managed to better its performance by 10% to reach the safety benefits of the latest technologies will be released
new pan-European target of 95%. more slowly on to the market.
CHART 14 | C AR PARC AND AVERAGE VEHICLE AGE

LEVEL PLAYING FIELD AT SCRAPPAGE
A large network of unlicensed operators still exists and is
40 Car parc Average age at scrappage Average age of parc 15.0
capturing ELVs for the value of their metals. There is concern
35 14.0
that to maximise their profits they fail to carry out the legally
required depollution, putting the environment at risk. 13.0
30
In order to achieve the new 95% target, a sizeable 12.0
Average vehicle age
25
Car parc (millions)
investment has been made in highly efficient processes, 11.0

20
which deal in post shredder residue such as gasification 10.0
plants and plastics recovery. The long-term viability of 15
9.0
these investments requires high volumes of vehicles going 10 8.0
through the system, and this process is being undermined
5 7.0
by the increasing numbers of vehicles being processed
outside of the manufacturers network, where non- 0 6.0
’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16
compliant processes may be evident.
END-OF-LIFE VEHICLES (ELVs)
EV BATTERIES
With the emergence of alternatively fuelled vehicles, the The flexibility of remanufacturing can also deliver significant
biggest share of a vehicle’s carbon footprint will shift from benefit in addressing replacement part availability in the car parc
use to the production process and vehicle end of life. To and help to keep millions of vehicles on the move. As the number
address this issue for electric vehicles, manufacturers are of niche models grows, product cycles shorten and parts ranges
focusing their efforts on battery remanufacture and reuse proliferate, it is becoming extremely hard for new replacement
to extend their life while reducing the overall environmental part providers to ensure the necessary range for service and
impacts. In line with circular economy principles, some repair, particularly of electronics content. Remanufacturing can
manufacturers already work on using them as energy provide timely availability solutions to this problem.
storage for private and commercial use.
Remanufacturing will also help to maintain the affordability
The industry also provides battery dismantling information and quality of the growing number of electric and hybrid
through the International Dismantling Information System vehicles in use. With diverse architectures, complex software
(IDIS) to enable their safe removal from vehicles, which have and expensive drive systems, battery pack and associated
reached the end of their life. ancillary equipment, remanufacturing can address essential
cost considerations in the maintenance of these vehicles and
REMANUFACTURING meet the rising quality thresholds from OEM customers.
Remanufacturing, commonly defined as the process of
bringing a product to a like-new condition, is enjoying Increasing use of software driven products and the difficulties
significant growth as vehicle manufacturers recognise its experienced in accessing technical information and parts
value not only from an environmental perspective but also details are a key concern to many in the sector, but with
for its proven ability to reduce warranty costs and increase growing engagement from all quarters in the circular economy
customer satisfaction. the future for remanufacturing looks healthy.
QUEENS AWARD AWARDED TO ATP

ATP has grown a small business repairing automatic transmissions into one of Europe’s leading independent
transmission remanufacturers and innovators, whose customers include Ford, Volvo, Jaguar Land Rover, Fiat Chrysler
Automobiles, Aston Martin and JCB.
ATP received the 2016 Queens Award for Industry in Innovation in recognition of the development of unique transmission
test equipment. Also last year the company invested almost £650,000 into automated cleaning equipment, which provides
a consistent 30% improvement in levels of cleanliness, as well as reducing water consumption and discharge by more than
100,000 litres per year compared with the previous manual processes.
The SMMT sustainability report has evolved considerably ranked the new issues that arose during the interviews
since its inception, and the latest development is the and workshop and agreed their overall rating. The post-
addition of SMMT's first materiality assessment (see page 4) workshop materiality matrix was then circulated to
to ensure the report continues to cover the most important stakeholders for final comment.
challenges facing the industry.
In this edition, as a starting point, SMMT aims to cover
The assessment involved desk-based research interviews topics scored highest by external and internal stakeholders.
with 12 external stakeholders and nine SMMT members In future reports, we plan to cover the remaining issues
(a balanced mix of vehicle manufacturers and suppliers) identified by the assessment.
were invited to comment on the sustainability issues It needs to be noted that the assessment outcomes
identified and rate each in terms of its importance to the presented here represent only a snapshot in time. The issues
UK automotive industry. This was followed by a workshop, identified are evolving and additional ones are appearing
where eight SMMT members and 12 external stakeholders over time. Therefore, future assessments can be expected.
Health and
safety
Future mobility and Air quality
sustainable cities Energy and
5 Manufacturing automation
climate change
Alternative
Human capital
powertrains
Noise
IMPORTANCE TO EXTERNAL STAKEHOLDERS
Energy future Geopolitical uncertainty
Social capital Ageing population
4 Economic sustainability Big data and cybercrime

Regulatory landscape Customer
Cross-industry Key
satisfaction
collaboration Circular economy Environment
Diversity and
Sustainable inclusion Social
Natural capital and biodiversity
sourcing Economic
Supply chain resilience
Ethical business conduct Governance
3
and ethics
Responsible lobbying
Environmental management Human rights Global
Responsible marketing trends
Water Inclusive and
accountable
Social investments governance
2 3 4 5
IMPORTANCE TO UK AUTOMOTIVE INDUSTRY
Human capital Alternative powertrains Energy  climate change Air quality

See page: 14 See page: 20 See page: 16 See page: 18
■ Employees’ training ■ Alternatively fuelled ■ Production-related ■ Powertrain emissions
■ Trainees and vehicle registrations energy usage and ■ Diesel
apprentices including buses CO2 emissions ■ Tyre and brake wear
■ Local schools ■ EV infrastructure ■ Overall road transport particulate emissions
engagement ■ Hydrogen CO2 emissions ■ VOC - manufacturing
infrastructure ■ Car and light van emissions
CO2 emissions
■ Biofuels
Health and safety Future mobility and Ageing population Geopolitical uncertainty
sustainable cities See page: 10
See page: 14 See page: 15 ■ Brexit implications
■ Employees’ safety See page: 21 ■ Ageing workforce
■ Road and ■ Connected and for VMs  its suppliers
and drivers
vehicle safety autonomous vehicles
SIGNATORIES TO THIS REPORT
Signatories to this report Brands
ATP ATP
Aston Martin Lagonda Ltd Aston Martin, Lagonda
Bentley Motors Ltd Bentley
BMW Group UK including Rolls-Royce Motor Cars Ltd BMW, MINI, Rolls-Royce
Bosch Bosch
CabAuto CabAuto
Caterpillar Caterpillar, Perkins
Covpress Assembly Ltd Covpress Assembly
DHL DHL
Ford Motor Company Ltd Ford
General Motors UK Ltd Vauxhall, Opel and Holden
GKN Driveline Ltd GKN
Honda (UK) and Honda of the UK Manufacturing (HUM) Ltd Honda
IBC Vehicles Ltd Vauxhall, Opel
Jaguar Land Rover Ltd Jaguar Cars, Land Rover
Leyland Trucks DAF Trucks
Lotus Lotus
McLaren McLaren
Michelin Tyre plc Michelin
Nissan Motor Manufacturing (UK) Ltd and Nissan Technical Centre Group Infiniti, Nissan
Optare Optare
Pritex Pritex
PSA Group Citroën, Peugeot, DS Automobiles
Schaeffler Schaeffler
Toyota (GB) plc

Lexus, Toyota
Toyota Motor Manufacturing (UK) Ltd
Unipart Unipart Logistics
Audi, SEAT, ŠKODA, Volkswagen Passenger Cars, Volkswagen Commercial

Volkswagen Group (UK) Ltd
Vehicles
Volvo Car UK Ltd Volvo
REFERENCES AND ONLINE CONTENT
SEE PAGE 4 FOR THE FULL SUMMARY TABLE REFERENCES:

Key – See page 20 for full details.
AS = signatories 1. Automotive Council; Growing Automotive Supply Chain,
WI = whole industry
Local Vehicle Content Analysis.
VMs = vehicle manufacturers only
(WI) Whole industry data http://www.automotivecouncil.co.uk/wp-content/
(AC) All car registrations in the UK uploads/2015/09/UK-local-sourcing-content-research-
(AS) All signatories September-20151.pdf
(VMs) UK vehicle manufacturer signatories
(CV) Commercial vehicles
2. Automotive Council; Growing the Automotive Supply
(CO2) Carbon dioxide.
Chain; Assessing the upstream sourcing potential
The report has 28 signatories which represent 99.6% of vehicle http://www.automotivecouncil.co.uk/wp-content/
production in the UK. New signatories include, ATP, Lotus and uploads/sites/13/2014/11/Growing-the-Automotive-
McLaren– a remanufacturing company and two low volume car Supply-Chain-2014-0411141.pdf
producers respectively. Also two companies Alexander Dennis
and CEVA Logistics left SMMT’s membership and therefore are
3. Governments Office for Science;
no longer signatories to the report.
Future of an Ageing Population
* The 2015 and 2016 data has been adjusted to take into https://www.gov.uk/government/uploads/system/
account new and leaving signatories to enable year-on- uploads/attachment_data/file/535187/gs-16-10-future-
year comparison. of-an-ageing-population.pdf
** Sector turnover, R&D and jobs dependent on the sector
are compiled from several official sources using expert
SMMT analysis. The 2015 and 2016 figures are based on 4. National Statistics: Final UK greenhouse gas emissions
projections. national statistics: 1990-2015
*** Estimate of manufacturing, distribution, refuelling and https://www.gov.uk/government/statistics/
repair of vehicles where automotive is the main activity of final-uk-greenhouse-gas-emissions-national-
the firms. statistics-1990-2015
All per vehicle figures also contain resources used during

engine and battery production, some of which are destined 5. ACEA: Reducing CO2 emissions from cars and vans
for export. https://www.acea.be/uploads/publications/06052015_
ACEA_Tackling_Road_Transport_CO2_Emissions_paper_
UK Production – the completed vehicles as they leave the cm.pdf
production line in a UK facility.
Registrations – vehicles registered for road use in the UK 6. Transport energy and environment statistics: 2013
for the first time with the DVLA or the DVLA’s equivalent https://www.gov.uk/government/collections/energy-and-
organisation in Northern Ireland, Channel Islands or Isle of Man. environment-statistics
UK Turnover – the money/income that a business generates 7. SMMT based on TfL data
each year.
https://www.smmt.co.uk/2017/03/smmt-calls-for-faster-
UK expenditure on Business and R&D - the amount, in take-up-of-latest-low-emission-buses-to-help-cut-
monetary terms, spent on research and investment, each year. londons-nox/, https://tfl.gov.uk/corporate/publications-
. and-reports/bus-fleet-data-and-audits
REFERENCES AND DETAILED DATA 8. National Statistics: Reported road casualties in Great
ON THE AUTOMOTIVE INDUSTRY PERFORMANCE Britain, main results: 2015
CAN BE FOUND AT https://www.gov.uk/government/statistics/reported-
www.smmt.co.uk/sustainability road-casualties-in-great-britain-main-results-2015
The webpage also contains links to signatories’

sustainability websites.
THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS LIMITED
71 Great Peter Street, London, SW1P 2BN
Tel: +44 (0)20 7235 7000
E-mail: [email protected]
:@SMMT :SMMT
www.smmt.co.uk
SMMT, the ‘S’ symbol and the ‘Driving the motor industry’ brandline are registered trademarks of SMMT Ltd
Disclaimer
This publication contains general information and, although SMMT endeavours to ensure that the content is
accurate and up-to-date at the date of publication, no representation or warranty, express or implied, is made as to
its accuracy or completeness and therefore the information in this publication should not be relied upon. Readers
should always seek appropriate advice from a suitably qualified expert before taking, or refraining from taking, any
action. The contents of this publication should not be construed as advice or guidance and SMMT disclaims liability
for any loss, howsoever caused, arising directly or indirectly from reliance on the information in this publication.
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2017 UK AUTOMOTIVE

Despite the increase in production, industry employment

The pathway to improved CO 2 and air quality performance

New car CO2 down

Average age of vehicles at

PRODUCTION (pages 5-13) PEOPLE (pages 14-15)

USE (pages 16-22) END-OF-LIFE VEHICLES (pages 23-24)

Automotive manufacturing sector turnover * (£ billion) 47.9 71.0 77.5 9%

Expenditure on Business R&D ** (£ billion) 0.9 2.5 2.5 0.0%

AS Signatories’ combined turnover (£ billion) 21.0 75.1 74.9 -0.2%

AS Total combined energy use (GWh) 7,013 4,588 4,673 1.9%

AS Total combined water use (000m )3

VMs Water use per vehicle produced (m /unit)

AS Total combined CO 2 equivalents (tonnes) 2,182,926 1,316,989 1,344,026 2.1%

AS Total combined waste to landfill (tonnes) 80,399 4,415 3,180 -28.0%

AC Average new car CO 2 emissions (g/km) 181.0 121.4 120.1 -1.1%

WI Number of jobs dependent on the sector*** 907,000 814,000 814,000 0.0%

Combined number of employees 100,036 98,161 109,890 11.9%

Number of training days per employee 3.8 2.7 2.9 9.1%

PERFORMANCE REASONS FUTURE CHALLENGES

UK Commercial Vehicle (CV) output remained broadly steady in

PRODUCTIVITY RESEARCH AND DEVELOPMENT

Signatories reported £74.9 billion turnover (note; signatories

INVESTMENT DURING 2016

ENERGY CHART 1 | ENERGY USE AND VEHICLE PRODUCTION

Energy – Total (GWh) and p/vehicle (kWh)

Vehicle production, millions

In 2016, vehicle manufacturers’ (VMs) absolute energy usage

CHART 2 | VM CO2 PRODUCTION: TOTAL AND PER VEHICLE

Some signatories such as Bentley Motors, Toyota Motor

Combined water used (000m3)

m3 per vehicle (line)

LEYLAND TRUCKS IMPROVES

FORD’S DAGENHAM CUTS WATER USAGE

WASTE CHART 4 | VM WASTE –

0.9% of all waste produced. 100%

BY 2016, THE FOLLOWING 10 SIGNATORIES WERE ZERO TO LANDFILL

VOLATILE ORGANIC COMPOUNDS (VOCS) MICHELIN DRASTICALLY REDUCED

REDUCED INCREASED MACHINE TIME TO

BENEFIT TO BENEFIT TO BENEFIT TO TOTAL CUMULATIVE

£2.6 billion £1.7billion

£4.3 billion £74 billion

BREXIT The automotive sector therefore wants the UK to:

SMALL VOLUME MANUFACTURERS

low volumes and often complex construction, they have

Although signatories have seen impressive net growth in

SVMs are particularly concerned by a future outside the EU

2015 2016 % change 2016 on 2015

Production (tonnes) 4,729 6,888 45.7%

Total combined energy use (MWh) 83,011 81,536 -1.8%

Energy used/output (per tonne shipped) (MWh/unit) 17.55 11.84 -32.6%

Total combined water use (000m 3) 71 72 1.3%

Water use per vehicle produced (m 3 /unit) 15.0 10.4 -30.5%

Total combined CO 2 equivalents (tonnes) 25,722 25,544 -0.7%

CO 2 equivalents per vehicle produced (tonnes/unit) 5.44 3.71 -31.8%

Total combined waste to landfill (tonnes) 6 4 -41.7%

Waste to landfill per vehicle produced (kg/unit) 1.3 0.5 -60.0%

AUTOMOTIVE SUPPLY CHAIN

SUPPLY CHAIN KPIs

The overall activity level expressed as weight of product

ENERGY CHART 1 | ENERGY USE AND VEHICLE PRODUCTION

CHART 2 | VM CO2 PRODUCTION: TOTAL AND PER VEHICLE

WASTE CHART 4 | VM WASTE –

CHART 14 | C AR PARC AND AVERAGE VEHICLE AGE