Despite another oil crisis looming, a recent survey carried out by Deloitte show that mass adoption of electric vehicles (EVs) is still a distance away.  According to the survey, only 16 per cent of European consumers identify themselves as potential first movers, while 53 per cent say they might be willing to consider and 31 per cent say they are not likely to consider purchasing or leasing an EV.

Mass adoption of electric vehicles will be significantly influenced by a number of factors, including rising fuel prices, advancements in internal combustion engine vehicles, and the availability of government incentives. The survey shows that there is a tipping point in terms of fuel prices influencing consumer adoption of EVs. In addition, automakers will be challenged to price electric vehicles to meet the expectations of consumers while maximizing their margins.

For mass adoption, manufacturers will need to meet the challenge of pricing electric vehicles in line with consumer expectations, while still maximising their margins.  Consumers are not likely to want to pay a high price premium for EVs.  This means that incentives such as tax reductions and exemptions will be very important to the purchase decision.  Just like the Government supported the highly successful car scrappage scheme, they should now be turning their attention to electric vehicles.

However, a bright note for the UK is that it appears from our research that UK consumers are more willing to pay a premium for electric vehicles than their counterparts in other European countries. Manufacturers believe that it should be possible to achieve a range of nearly 300 miles, coupled with quick charging times of less than 10 minutes in the next three to five years time. Once this is achieved, we can expect to see a rapid take up of electric vehicles. It is possible that, as with the rapid adoption of diesel engine vehicles back in the early to mid nineties, we could expect to see up to 20% of all light vehicles  being electric within the next decade.

To review the report – click here – Gaining Traction

Why has snow hit the economy so badly this winter? asked the BBC’s Andre Reuben and in some sectors it was easy to see how. Utilities enjoyed a bumper back end to 2010 as consumers turned up the heating to contend with the biting cold, while construction and retail were adversely affected by the snow.

So shopper stayed home, building work ground to a halt and there was a 10 per cent fall in petrol sales as people stayed home ratehr than contend with chaos on the raods. 

Even the part of the Office for National Statistics (ONS) that calculates the official growth figures for the economy had to postpone its Christmas party because of the weather, and will not be holding it until April.

But, while the economy as a whole shrank by 0.5 per cent, manufacturing saw growth of almost 1.5 per cent in the last quarter with exports and the automotive sector leading the resurgence.

The figures were released as leading indiustry figure met with government ministers at the Advanced Manufacturing Growth Summit to discuss how to promote UK manufacturing excellence, challenge perceptions of the industry and dispel the belief that Britain does not produce goods.

“There is a common misconception that there is no manufacturing in the UK, yet we are one of the largest manufacturers in the world…contributing some 18 per cent GDP, said one participant at the summit.

Time for manufacturing to come in from the cold?

Read more: http://www.theengineer.co.uk/summit-considers-how-to-boost-growth-in-uk-manufacturing/1007103.article#Scene_1#ixzz1CFACMf38

Finding the right people will also be crucial to long term sustainability of manufacturing. This was reflected in discussion round our table, with many manufacturers now ‘importing’ skills form other parts of the UK but recognising that, ultimately, the ageing workforce profile of the sector makes it essential to open up manufacturing to a new generation.

It’s a problem across the sector as shown by the launch today of the ‘Work Wise’ initiative, which aims to encourage and support young people to take up careers in manufacturing and engineering. The initiative has been backed by 50 South Yorkshire employers who are accutely aware of the need to renew the skills base within industry instead of companies feeding off one another’s skills base.

Given that there nearly twice as many people employed in manufacturing in West Yorkshire than there are in South Yorkshire, the need for an initiative in this kind is even more pressing. Something for the Leeds city region Employment & Skills Board and organisations like the EEF to consider?

• Manufacturers reported 33% growth in export sales and 11% growth in export orders, the largest reported improvements in over two years
• Matched by a 27% increase in sales in the domestic market (the third consecutive quarter of improvement) and a 8% increase in orders (second consecutive quarter of improvement)
• 43% report an increase in profit expectation, most positive figure in over two and a half years
• 44% have increased their workforce and 20% are recruiting

The findings are consistent with the results of the CBI’s latest quarterly Industrial Trends Survey which shows an export-led rise in manufacturing production for the first time in two years: 31% said output rose during the last quarter of 2009, the first time since January 2008, boosted by relative weakness in Sterling and improving global demand.

Engineering Employer’s Federation has also forecast export-led growth of up to 3.4% in manufacturing during 2011, although performance will be uneven across individual sectors. Mechanical equipment, metal products and metals will see strong quarter on quarter growth throughout the year, while transport and automotive will see fall in output as scrappage schemes run out and as a result of cuts in public spending

It also bursts the bubble of some popular misconceptions. The loss of manufacturing jobs is a global phenomenon and it has been particularly severe in the UK where the last 30 years have seen the loss of some 4 million manufacturing jobs. But this has been matched by massive gains in productivity to the extent that in 2006 the UK was still the sixth largest manufacturer in the world and the real value of manufacturing output continues to grow.

It’s a case therefore of relative, rather than absolute, decline and growth has been maintained in the face of incessant and fierce price competition from emerging economies. The survival of UK manufacturing is a success story and the sector has a depth of experience from which others could learn.

However, the image and definition of manufacturing desperately needs updating: many ‘manufacturers’ today are integrated solutions providers providing complex bundles of specialised goods and services. Key opportunities in the future exist in the development and exploitation of new technologies, intellectual property and complex product / service combinations that cannot be easily replicated or commoditised.

For this to happen there’s an urgent need for closer collaboration between government, academia and business. Government needs to develop a tax regime, including incentives such as tax credits, that encourages investment in R&D, capital expenditure and energy efficiency.

Overtime, labour cost differentials will diminish and sources of competitive advantage will shift towards unique knowledge and skills. Much closer collaboration is therefore needed between industry and UK universities to more fully exploit their research capacity and intellectual property.

Some of the other key points form the report include:

• Low value of sterling offers a temporary cushion against the worst effects of the recession but cannot provide a source of long-term competitive advantage and the report authors note that despite the relative weakness of the pound, the balance of trade with the Euro zone has worsened.
• UK manufacturing faces a serious deficit in technical skills and continued los of skills, rather than competition, could eventually make UK manufacturing unsustainable: jobs and skilled employees lost in a recession do not tend to come back as the economy recovers.
• Training needs to improve. foreign industrial investors are often dismayed at the levels of training needed by UK employees
• at the same time there is a desperate need to improve the image of manufacturing is vital: young people will not train for careers in manufacturing and engineering if they think there’s no future in them.
• There’s a desperate need for investment in both R&D – spend as a percentage of GDP is lower in the UK (1.8%) than in other countries such as Germany (2.5%), Japan (3.3%), the US (2.6%) and Sweden (3.8%).
• And there’s a need for much greater support for entrepreneurship: only 4% of investment goes into venture capital in the UK compared to 33% in the US.

While UK car salesmen and delivery drivers are understandably rubbing their hands, it appears overseas manufacturers are the main beneficiaries. Volkswagen manufacturing plants in Germany are working seven days a week to churn out extra volume to meet the increased British demand and imports from the Far East are also buoyant.

But very few of the incremental sales are picked up by home manufacturers, such as Nissan in Sunderland and Vauxhall, Ellesmere Port.

Environmentally, the programme also demonstrated that many eminently roadworthy cars with little or no residual value, are being junked for the £2000 bonus.

And Yorkshire entrepreneur Lawrence Tomlinson’s situation made fascinating viewing. His Garforth plant turns out the sexy Ginetta sports cars and was, until recently, developing a prototype electrically-powered model. Ginetta applied for Government funding for the project and was turned down flat, so work has halted.

Lawrence was regularly driving the prototype home and re-charging it via wind power – about as green as motoring can get!