Motorsport: the 'bright spark' of UK manufacturing
07 December 2012
Latest figures from the MIA show that UK engineering companies supplying the likes of Formula One, NASCAR, the WTCC and others are bucking the national trend.
Nearly 60 percent of these companies saw an increase in sales over the last financial year.
Despite continued pessimism on the state of UK manufacturing*, data from the Motorsport Industry Association'S (MIA’s) latest Motorsport Business Survey (2011/12), shows this UK industry enjoying increased output, increasing investment in research and development (R&D) and an upturn in job opportunities for skilled engineers and apprentices alike.
Of those that had seen an increase in sales turnover, more than 10 percent saw a rise of over 50 percent, compared to the previous financial year. Over half of UK motorsport engineering companies reported having higher value future-order books, year on year, despite the ongoing global recession.
Such optimism is reflected in the amount of investment going into R&D, according to the MIA report, which confirmed that 17 percent of motorsport engineering companies invest over 30 percent of their turnover on R&D – far in excess of UK engineering as a whole, and 25 percent of businesses invest between 15 and 30 percent.
Such strong investment in R&D has been encouraged by the Government’s tax credit scheme, which has been claimed by 55 percent of motorsport engineering businesses in the last three years. Such clear commitment to R&D programmes to develop new engineering innovations has enabled motorsport companies to diversify into new markets, and stay ahead of competition.
Alex Burns is CEO of Williams F1, a leading Formula One team which has diversified into low carbon technologies and Kinetic Energy Recovery Systems in recent years. He said: “2012 has been a very successful year for Williams F1, in addition to ending the year in a good position in the Formula One World Championship. Our decision to exploit our assets more widely, by diversifying into other sectors, particularly low carbon, have significantly improved the security and strength of our business plans. We look forward to 2013 with cautious optimism.”
Recent valuable, new business has been secured in complementary market sectors such as defence, automotive, aerospace and marine providing UK motorsport engineering businesses with valuable growth opportunities.
According to the MIA, 80 per cent of motorsport businesses now export, with 22 percent claiming that overseas sales accounted for over 50 per cent of their turnover. While the USA was identified as the single largest export market (comprising 24 per cent of all exports), it also remains the most attractive region for growth potential, with 42 percent of businesses citing it as a key target. Interestingly, the 2012 MIA Business Report recorded exports (7 percent) to the Chinese market for the first time.
Chris Aylett, chief executive of the MIA, commented: “Our report, the only one of its kind, shows that the world-beating UK motorsport industry is in rude health, with great future prospects. We’re seeing a growing appreciation, across the globe, of our pre-eminence in the field of high performance engineering, and for the quick-turnaround solutions demanded by the worldwide motorsport industry.
"A fast-growing number of these outstanding UK manufacturers are expanding, by exploiting their assets to the full, and diversifying into new markets such as mainstream automotive and defence. Transferable skills from motorsport include rapid prototyping, lightweight, low carbon, energy efficient solutions, and R&D based innovations which are in high demand.
“The UK motorsport industry is clearly bucking the pessimistic trend in manufacturing, but there remains frustration with some government inaction which holds back growth. Specifically, endless red tape, lack of a coherent growth strategy and of bank finance were identified as barriers to future rapid progress.”
Turning to employment prospects in motorsport engineering, the report confirms that 56 per cent of companies had increased their headcount during 2011/12, and an encouraging 62 percent plan to recruit more staff in the next twelve months.
While such employment figures, and future forecasts for the UK motorsport engineering sector are encouraging, the inability to recruit the right calibre of engineer was also identified as a major threat to future expansion. When asked to identify the two main threats facing their motorsport businesses, respondents cited ongoing economic uncertainty and lack of local skilled technicians and engineers as the key factors.
*CBI Survey of Manufacturers – November 2012