The Automotive Industry still has a future by Michael Meakin, Clement Keys
Author: Michael Meakin
Last Updated: 8/11/2009 10:22:33 AM
Summary
The automotive industry is feeling the brunt of the recession and has had a lot of negative publicity because of financing problems and the recent tragic accidents.
Michael Meakin, a partner at chartered accountants Clement Keys who specialises in motorsport and Sharon Quaife-Hobbs, sales and marketing director of RT Quaife Engineering Ltd, a world leader in the design, development and engineering of automotive parts, agree that whilst this is creating difficulties for the sport, the automotive industry behind the sport is still strong. Their view is that the outlook is positive because of the UK’s reputation for excellence and the benefits that a weaker pound brings to manufactures who export internationally.
Article
"The UK is renowned the world over for its automotive
engineering expertise, especially in international motorsport, and
companies operating in this area are benefiting as the drop in
value of the pound against the euro is giving a welcome boost to
productivity," says Meakin.
"Foreign racing teams are choosing to purchase components from
UK-based suppliers because the currency situation means it is more
cost-effective and this, in turn, will help save UK jobs."
He also says the currency situation has led to European and
American drivers wanting to contract with British teams, race in
British series such as Formula 3 and pay for their racing in
sterling because it is cheaper for them than going racing in
Europe.
Indeed, this is a view echoed by Daventry-based Fortec
Motorsport, which has competed in a number of high-profile
championships during the past 12 years and has signed Spanish
driver Victor Garcia to contest the 2009 Cooper Tires British
Formula 3 International Series. Similarly, foreign drivers
are more likely to consider using British teams to compete in
European series such as Formula BMW Europe or the various Formula
Renault championships because it will be more cost effective in the
current climate.
Whilst the weak pound is cause for concern in many areas, it
does create positive opportunities for the UK's motorsport
industry, many of which are located in the West Midlands and along
the M40 corridor. R T Quaife Engineering Ltd, which is
regarded as barometer for the industry because it sells specialist
products and has experience as a supplier, sponsor and competitor,
is reporting a surge in orders from the EU.
Established in 1965, Quaife is a leading designer and
manufacturer of driveline and steering rack components for cars and
motorcycles plus other advanced transmission and upgrade parts for
road and motorsport. It exports in excess of 70% of its
production to an expanding global market.
"Last year we posted our best ever sales results for the month
of December thanks to the latest economic developments," says
Quaife-Hobbs.
"We've seen a major increase in business from Europe and
although there hasn't been such a marked response from the USA as
yet, teams just don't seem to want to spend, this could well change
in the coming months."
Technological development is the lifeblood of Formula One and
new for 2009 is that each team is only allowed a maximum of eight
engines this year, while slick tyres are back after an 11-year
absence and there are new rules regarding aerodynamics: the latest
cars have more grip but less down force, so they are slower than
their predecessors. Measures for 2010 include banned
re-fuelling stops and longer life engines and gear boxes with more
drastic measures being discussed for 2011.
"Industry estimates put the F1 teams' collective expenditure for
the 2008 season at £2 billion and while there is a long
way to go to make the saving the sport is committed to achieving,
the new measures introduced for 2009 are expected to help reduce
costs by 30%, which can only be good news for all involved," says
Quaife-Hobbs.
Although the motor industry is going through a very difficult
period, despite the surge of interest now that Michael Shumaker has
returned to the track at the age of 40, Mr Meakin says motorsport
remains a showcase for the UK, thanks not only to its innovative
design, precision and high performance engineering companies, but
also to the event management, marketing, PR and sponsorship
businesses that have grown up around it. According to UK
Trade & Investment, motorsport employs some 40,000 people,
including 25,000 skilled engineers, and contributes over £5
billion a year to the UK economy.
"It's encouraging that the economic situation has provided an
upside for motorsport, but it is investment in the automotive
engineers of the future that will ensure the industry is
well-placed to thrive over the long term," adds Michael Meakin.
"There are now around 25 UK universities and colleges offering
motorsport engineering courses - last year we helped a group of
students from the University of Birmingham who are keen to make
their careers in motorsport by supporting their entry in Formula
Student - and the qualifications are still recognised as some of
the best in the world."
The Author
Michael Meakin is a partner at Birmingham based
Chartered Accountants Clement Keys and specialises
in Motorsport.
For further information you can contact Michael on 0121 456 4456
or visit the Clement Keys website: www.clementkeys.co.uk