As businesses begin to emerge from the recession, partnerships within high-growth economies are vital if UK engineering is to remain competitive.
This was the message put to leading engineering companies at a UK Trade & Investment (UKTI) event held in Sao Paulo earlier this month. Backed by key figures in industry, the event aimed to outline opportunities for UK advanced engineering expertise.
Speaking to The Engineer, Keith Jordan, business development manager at the Society of Motor Manufacturers and Traders (SMMT), explained why collaboration with Brazil could help improve prospects for UK industry.
‘One of the great things about the Brazilian market is its sheer size,’ said Jordan. ‘This year in the automotive sector alone the country is going to be close to building three million vehicles. It also has a very strong aerospace and construction equipment industry that could be of huge benefit to the UK.’
The UK’s own automotive sector is worth more than £4.5bn and contributes around £9.8bn to the British economy. Around six of the world’s top 10 vehicle makers and 19 of the top 20 auto parts markers have a manufacturing presence in the UK. Jordan claims this places the UK at a clear advantage to partner with leading global businesses.
‘It’s the expertise we have, the innovative ways of looking at processes, improving productivity and up-skilling people that are so attractive to other companies,’ said Jordan. ‘The impact advanced engineering has had in the UK, across many sectors, has been so great that many other countries would like to copy what the UK has done.’
He added: ‘To protect this expertise we can’t work in a vacuum. We operate through global supply chains now and capital moves around the world very quickly. Companies are extremely keen to identify the best operations and locations in the world from which to serve their customers.’
Brazil was the first Latin American economy to emerge out of the recession with a 1.9 per cent quarter-on-quarter increase in economic activity from April to June. According to UKTI, its strong figures have been the result of a high degree of diversification of its economy and trading partners.
The government hopes to use the same strategy to drive forward economic recovery in the UK. Car manufacturers in particular have been working with suppliers to make sure they are ready for when volumes return. However, the recovery is expected to be slower for the automotive industry as volumes are pulled forward by the scrappage scheme.
Jordan said: ‘Manufacturers have to make sure that there is still a reason for customers to buy their vehicles, not just because there is a benefit of a couple of thousand pounds incentive.’
Jordan predicts this incentive will come from producing greener and more cost-effective cars, requiring innovation and a high level of advanced engineering expertise. ‘This is what the UK is best at,’ he added. ‘I think the jury is out on exactly which way green cars will go, but it’s inevitable that the mix is going to change to more fuel-efficient cars with different types of motive power, hybrids and electric cars… whatever happens I think it will be global collaboration that will be key to our success.’