The Midlands is the spiritual home of the British automotive industry. It’s a legacy that stretches back nearly 130 years to the very dawn of motoring. But the region is also at the forefront of the emerging low carbon automotive sector, with a formidable skillset that ranges from academic research to large-scale vehicle production.
The sheer breadth of these capabilities in the Midlands is a topic that comes up time and again when you speak to organisations in the region.
“I think what makes the Midlands so strong is the ecosystem that’s developed around here. It’s not just the OEMs, but the tier ones and tier twos, the consultancies, the test houses, the industrialisation centres and the academic institutions,” said Alex Wood, senior project delivery lead at the Advanced Propulsion Centre (APC).
“The original idea behind the APC was to connect the dots, with perhaps an OEM and a tier one working together with a route to market. It’s all about different organisations working in collaboration, and the knowledge transfer it brings.”
It’s a point emphasised by Adam Donfrancesco, technical director at design and engineering business CALLUM: “Within a 30-mile radius of where we are in Warwick, it’s possible to get anything designed, made or tested to a very high standard. And that’s from one-offs to high volume manufacture. The Midlands remains one of very few places in Europe where you can do that.”
This diverse ecosystem doesn’t just come from the different engineering disciplines represented within the region, but from companies at different stages of growth. Concepts such as open innovation and corporate venture capitalism are becoming increasingly common as OEMs that might once have developed everything in-house seek to partner with agile and innovative start ups.
Last year, for instance, Jaguar Land Rover became a founding partner of the UK Mobility programme set up by Silicon Valley-based venture capital fund Plug and Play. Much like the APC, this group focuses on connecting different layers of the industry – potentially putting start ups in contact with global OEMs that they might not otherwise have a chance to encounter.
“There is the opportunity for a new paradigm, joining the experience and depth of the existing supply base with new, innovative start-ups. This partnering can blend into a new business model to support next generation mobility,” commented Richard Green, senior vice president for sales at ZF, which has recently opened a new £70m R&D hub in Solihull.
Ultimately, it’s this combination of bright ideas and supporting investment that has made the Midlands an automotive powerhouse.
“We know first-hand that a skilled workforce is a principal driver for global companies to choose to set up development centres on our site in Nuneaton,” said Declan Allen, managing director of HORIBA MIRA. “As a consequence, expanding the skilled workforce in the region has been key. For our part, we have doubled the number of skilled automotive jobs to 1,400 across our site in the past 10 years.”
It’s a skills market that’s currently evolving at unprecedented pace, and Green emphasises the need for the industry to keep pace.
“The right skills at the right time will remain critical in the transition to low carbon technologies – as will ensuring the necessary caliber of trainers and relevant training material, such as software skills,” he commented. “Local universities such as Birmingham, Coventry and Warwick are growing new talent and many of the industry players – both established organisations and start-ups – already have apprenticeship and graduate schemes in place.”
New opportunities
It’s no secret that the last few years have been tough for the UK automotive industry with Brexit, chip shortages and Covid rolled into one. But there are also opportunities out there as a result of the shifting technological landscape.
“Any time there’s a period of change you also get opportunity. That very much applies to the current move towards electrification,” noted Wood. “Often, the skills are transferable. For instance, in 2017 we began working with a company in Leamington Spa called Aeristech that was developing electric turbochargers for IC engines. This led to a collaborative R&D project with Cummins to develop oil-free compressors that can deliver the very clean air required for hydrogen fuel cells.”
Donfrancesco said that the team at CALLUM has also identified new demands that are emerging from the push towards sustainability: “We see decarbonisation as a huge opportunity and differentiator that could elevate our region to a centre of excellence in the world. Just last month we revealed details of our own low carbon study assessing the viability of more sustainable materials such as adopting coffee pulp and lentils in automotive interiors. We see a customer pull for this and a lack of awareness of the benefits within the industry. The study has been the catalyst for new interest from across the automotive sector.”
Although the region’s success as an automotive hub owes much to its homegrown heritage, this has also brought a lot of inward investment. Polestar, for instance, has its own R&D centre near Nuneaton. The Swedish EV specialist’s UK hub has more than doubled in size in recent years, with plans to employ up to 800 people.
We’ve got exceptionally good research and development capabilities in the UK, much of which is centred around the Midlands. Because of that, we get a lot of foreign direct investment and OEMs having established R&Ds centres, because they want to tap into that knowledge pool that we have
Alex Wood, senior project delivery lead, Advanced Propulsion Centre (APC)
Elsewhere in the region, Indian motorcycle manufacturer TVS has recently invested £100 million in a new factory in Solihull for the Norton brand, which it acquired in 2020. Israeli truck firm REE, which already has an R&D centre in Nuneaton has also announced a new smart factory in Coventry. And Tata Technologies – owned by the Mumbai-based Tata Group – has just announced plans to expand its European headquarters in Leamington Spa.
“We’ve got exceptionally good research and development capabilities in the UK, much of which is centred around the Midlands. Because of that, we get a lot of foreign direct investment and OEMs having established R&Ds centres, because they want to tap into that knowledge pool that we have,” commented Wood. “That’s one of the things that helps us to react fast to changing circumstances, and now is definitely the time to make sure that we are in a good place for the future.”
There’s a consensus among our experts that the Midlands has already benefitted from both public and private investment, but more is needed to build on that progress.
“The Midlands is competing on a global scale for work. Whether that’s design, engineering or manufacturing, we need the support and business conditions to compete,” said Donfrancesco. “We have the creativity, the experience and ability right here to take on the very best from anywhere, but long-term stability with investment in education, innovation and infrastructure are needed to enable companies such as ours to thrive.”
Allen agreed that investment is key: “The combination of private investment into technical facilities supported by government investment into critical infrastructure has enabled the creation of world class low or no carbon mobility capabilities in the area. These have enabled real momentum with a number of automotive clusters around hydrogen, simulation, autonomy and other technologies that thrive on the intersection of highly skilled labour and great physical and digital engineering facilities. The reason the Midlands has scored well from our perspective is that it delivers on public funding ROI. Projects are delivered, high quality jobs are created, new revenues are generated and returns are made to the regional economy.”
New challenges
Along with the opportunities there are, of course, challenges. The Midlands boasts one of the widest engineering skillsets in the country, but the pace of development is such that the job market still sometimes struggles to keep up with the demand. “If you were to canvas a lot of the businesses that we work with, one of the big things that they do struggle with is recruitment and retention,” said Wood. “There’s lots of high-value job creation going on with the way the industry is progressing, but it’s a very competitive market for engineers.”
That seems to be particularly true on the software side, with the growing complexity of control systems on modern vehicles, he notes: “Functional safety engineers that already have experience of delivering projects are like gold dust – the same for automotive cybersecurity specialists.”
And it’s not just R&D jobs that are in demand. While the UK remains a comparatively expensive place to manufacture, there’s talk of some UK companies ‘re-shoring’ their production back to the UK to improve the resilience of their supply chain. Similarly, the current geopolitical climate has promoted the concept of ‘friend shoring’, where countries with shared values work together to mitigate the risk of disruption, which may make the UK a more attractive partner to overseas firms too.
“We need government to keep investing and keep backing British industry. That’s essential, not just to maintain a level playing field with other places, but also because it allows businesses to pursue R&D,” said Wood. “Once that’s in place you can lay down the supply chain and the manufacturing base to ensure that the value generated by that R&D work stays in the area.”
The challenges that lie ahead are immense. Achieving net zero across the board – in a suitable timescale and at an affordable price – represents perhaps the biggest technological challenge in the UK automotive industry’s 127-year history. But it’s challenges like this that engineers relish. And you can be sure that the Midlands will be right in the thick of it.
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