The UK government is to co-operate with a group of auto companies to help fund a GBP1bn (US$1.5bn) research centre to develop low-carbon propulsion technologies. BMI believes that fuel-efficiency will become increasingly important across all markets, especially as fuel costs rise. We expect to see more joint ventures (JVs) between auto manufacturers to achieve this aim. Furthermore, we believe that governments and international bodies will have an increasingly important role in collaborating with auto manufacturers to reduce carbon emissions.
Some 27 auto companies, including vehicle producers and supply manufacturers, will invest GBP500mn (US$753.3mn) over the next 10 years in the Advance Propulsion Centre. The UK government will fund the other half of the project, which aims to research, develop, and commercialise new propulsion technologies.
BMI believes that further reductions in emissions levels may require higher levels of funding as the technology becomes ever more complex. BMI has long maintained that automotive manufacturers will increasingly form JVs in the field of alternativ e fuels and emissions reduction , as this will help create economies of scale and thereby reduce costs. Over the long-term, as the industry increasingly moves towards lowering emissions, we expect to see further collaboration between auto manufacturers.
Maturing Supply Chain
The investment ties with BMI 's long-held view of the strength of the British automotive manufacturing sector across the supply chain, and our belief the country will continue to develop as an export hub.
Many auto manufacturers have invested in the UK because of the competiveness of its domestic manufacturing industry. BMI believes that this attractive business environment and ongoing investment from vehicle producers has encouraged investment across the supply chain, a view borne out by this announcement. Further, autos suppliers are being urged by the UK government to establish new production facilities in the country.