Car industry faces tough future

The report said: “There may be large-scale job losses such as those seen at Ryton and Ellesmere Port in the future. It is therefore important that lessons are learnt from the experiences of dealing with the mass redundancies arising from the collapse of MG Rover.” It said it was vital to counter the threat of cheaper labour in eastern Europe and the higher transport costs to and from the UK compared to mainland Europe.

Peter Luff, chairman of the committee, said: “The industry and the government must put extra effort into improving skill sets throughout the automotive sector, increasing the commitment to research and development, adopting lean manufacturing techniques and strengthening the local supply chain if the UK automotive sector is to flourish in a challenging world market.” UK car manufacturing was stung by the collapse of MG Rover in 2005, and PSA's decision to close its Ryton factory last year. There is continued concern about the future of Vauxhall's Ellesmere Port plant on Merseyside.

The report called on the government to review the UK's research and innovation credentials: “We recommend the government review whether the UK is still at the forefront of innovative design and technology in the automotive sector, or whether research facilities are being used for work to support technological developments elsewhere in the world.” The MPs did highlight success stories such as Honda's plant in Swindon, Nissan's in Sunderland and BMW's Mini facility in Cowley, Oxfordshire. Sue Robinson, director of the RMIF's National Franchised Dealers' Association, criticised the report for failing to recognise the importance of the retail motor sector. “It all but ignores the distribution and sales aspect of the industry. This weakens the overall effectiveness of the report.”