The latest report from the All-Party Parliamentary Motor Group (APMG), Driving growth: Future challenges and opportunities for UK automative, makes some important recommendations to the UK Government:

1. Low-carbon technologies should be supported by the Government seeking out economic and environmental opportunities in the sector.
2. Labour supply should be focused on by a policy of making a career in car manufacturing more appealing to the workers of tomorrow.
3. Partnerships between Government and firms in the automobile industry should be strengthened. Especially, if the Government’s pledge to re-balance the economy is to succeed.
4. The Government ought to invest in the image of the UK as an attractive business base for automotive companies.

Before we delve deeper into those recommendations, here is a brief overview of the UK automobile industry. There are more than 40 firms manufacturing vehicles in the UK, with over 3,300 firms supporting the industry as a whole and with around 300,000 people working in the sector. The car exports equate to almost 13% (£27bn) of all UK exports and the number of vehicles produced in the UK, totals 2.5% of global vehicle production. Indeed, the major reasons that automotive brands come to the UK are engineering expertise, a skilled labour force and also government incentives.

So contrary to popular belief, the industry is actually in great health in the UK. In fact, recently BMW, Jaguar Land Rover and Nissan (amongst others), have made plans to boost production in the UK. BMW alone has invested over £1bn over the last decade and this trend is set to continue. The Government is making it favourable to do so.

So out of all of the above recommendations, it seems the Government is policy is already working and so it just needs to keep increasing that support.

The two most important recommendations to focus on seem to be support for low-carbon vehicles and support for increasing the future labour supply for the industry (which is declining, due to the growth in the service sector).

In terms of low-carbon technologies. The work needs to happen on the demand side, rather than just the supply side. RAC figures this year, showed that the 2nd quarter of 2011, saw a mere 215 electric vehicles sold in the country, through the EV Grant program (It allows a saving of £5,000 on electric vehicles). This is down by almost 245 cars in the same period last year.

Contrast this with the climate change regulations, which require 1.7 million electric vehicles on to be on the streets by 2020 and 6.6 million by 2030 and you can see that the Government is really going to find the first recommendation from the APMG report to be the toughest. A focus on stimulating the demand side with innovation in the design and engine elements of electric vehicles, might be an angle to tackle perhaps?

Finally, with regards to the long term labour supply. Focusing on partnerships with vehicle manufacturers to add the pledged 75,000 apprenticeships for the sector, might be the most strategic place to start.