Sunderland – the hub of the UK’s low-carbon automotive industry

Sunderland – the British auto hub which is seen as a model of how local government can partner with OEMs to create a globally competitive environment – is reinventing and repositioning itself as a manufacturing centre for the low carbon economy.

“To date the automotive industry has a great record of innovation. But, like all industries, it needs to do more and the desire to deliver vital breakthroughs in low carbon technologies, attract the best brains as its future life-blood and forge close partnerships with Government, Government agencies and academia,” says Richard-Parry Jones, CBE, co-chairman of the Sunderland Automotive Council.

Automotive Industries (AI) asked Dr Dave Smith, Chief Executive of Sunderland City Council, what investment has been attracted by the city positioning itself as an automotive hub.

Smith: We have welcomed US components manufacturer Lear Corporation which has spent more than £10m on creating a foam seat manufacturing plant. In addition, French component supplier Financiere SNOP Dunois Group chose Sunderland for its first UK plant. The achievements of the city’s supply chain companies also set the stage for a strong year of productivity and growth in 2014, with many pioneering work in their own fields. TRW, Calsonic Kansei, Unipres and Vantec Europe are among those that have re-invested in the city over the last two years. In fact during 2013 alone, the industry created 1,000 jobs and £275m of capital investment.

AI: What is the Sunderland City Council doing to help promote automotive manufacturing in the UK?

Smith: Sunderland City Council has always taken a holistic view of the automotive industry and we have created a robust environment that has helped sustain Nissan’s presence here and sustained employment in the city. We develop relationships with suppliers and encourage them to locate close to the plant – 75% are actually located around the plant – which reduces the logistic costs and speeds up delivery. Aftercare is a very important aspect of maintaining our relationships and our officers hold regular meetings with businesses to stay abreast of their plans and find out whether there is any other support we can offer.

AI: What impact will the recent Sunderland City Deal have on further investments in the region?

Smith: The £5m we received to develop the International Advanced Manufacturing Park will put Sunderland on the map as a low carbon city. The site is huge and the development itself will cover 100 hectares – providing space for new automotive, off-shore and other hi-tech businesses. It’s expected that the park will attract £295m of private sector investment and create an estimated 5,200 new jobs.

AI: Tell us about the contribution made by Nissan.

Smith: We should never underestimate the importance of the “Nissan effect,” which has helped Sunderland to become the automotive hub it is today. Nissan’s staff and management have been very focused on creating and sustaining a competitive plant. They have been able to attract new models by keeping costs low while ensuring quality remains high. Nissan likes the location of its Sunderland plant because it is close to its main European markets, which can be served very quickly from the Port of Tyne. We shouldn’t overlook the importance of the loyal and committed Sunderland workforce, which has a proven track record for competitiveness.

AI: What are some of the reasons for Nissan’s manufacturing success in Sunderland?

Smith: Nissan arrived in Sunderland in 1986 and has been the UK’s biggest car producer since 1998. I would point to the management team and great workforce and their focus on creating such a competitive plant. Nissan Sunderland has continued to innovate and this has not gone unnoticed by the management in Japan. The plant has been cited as the undisputed jewel in the company’s crown and acknowledged as one of the best car producers in the world.

AI: What future do you see for the Sunderland auto sector?

Smith: We are keen to see further growth, and our decision to position Sunderland as a low carbon city will help to fuel this expansion. Nissan announced a further £250m investment at the end of 2013 to accommodate a new premium model which is still to be announced. The new facilities will cover 25,000 square metres, and will create 1,000 jobs, including 280 new jobs at the Sunderland factory, plus more in the supply chain. A further 50 jobs were created as part of the £20m investment to kick-starts the production of the new Juke model.  Further investment and job creation are always a major vote of confidence, and ultimately it also has a positive knock-on effect to the supply chain in the city and the North East. A recently awarded City Deal for Sunderland in partnership with South Tyneside and the creation of the new international advanced manufacturing park, central business district and a new £80m River Wear crossing will also fuel growth. The park will boost the facilities for continued research and development in the low carbon sector.

AI: What are some of the new automotive investments coming into Sunderland?

Smith: The city has a cluster of three sites in the Low Carbon Enterprise Zone, which offers incentives and a simplified planning process to low-carbon businesses in the automotive, manufacturing and advanced engineering sectors. Zero Carbon Futures works with businesses in the sector to develop the new technologies that the automotive industry needs, from electric vehicle charging to propulsion techniques. The company is based at the Future Technology Centre in Washington and has developed a specialist track dedicated to testing new low-carbon transport. Of course, Nissan’s decision to produce the Leaf electric car here and the batteries it uses is a key draw for suppliers in the low carbon automotive industry.

AI then asked to Paul Watson, Leader of Sunderland City Council, why the city is the ideal hub for the low carbon economy in the UK.

Watson: As a City Council, we’ve committed ourselves to becoming a low-carbon city as one of the main aims of the Sunderland Strategy. We already have the infrastructure and experience to support businesses in the sector, with the low carbon Enterprise Zone and the research and development opportunities offered by Zero Carbon Futures. We have the North’s only testing track for low carbon vehicles and of course, Nissan has already put us on the low-carbon map with its decision to build the Leaf model here.

We also have diverse existing physical and natural assets, complemented by a variety of academic, public and business capabilities. There are already plenty of link-ups happening now between the public and private sectors that are putting us on the low-carbon map, but we are keen to encourage further partnership working to bring in further investment and jobs to the city. The framework is there and with the help that is available to support low carbon businesses looking to set up shop, we are confident this sector will form a major part of our city’s economy in the years to come.

AI: How does the proximity of the Nissan factory help Sunderland in its strategy to become a low-carbon emission city?

Watson: The company’s decision to build the model and its lithium batteries in Sunderland plays a huge part in our low-carbon ambitions. It brings both low carbon jobs at Nissan itself and in the wider supply chain across Sunderland. The facilities next to Nissan, including the incentives offered by the Low Carbon Enterprise Zone adjacent to the plant are aimed at the technology of the future.

AI: What are some of the investments the City Council plans to make in helping Sunderland become a leader in the new low carbon economy?

Watson: There are a number of targets we have to meet, including minimising both our greenhouse gas emissions and our reliance on fossil fuels. We have also committed to developing and manufacturing low and zero carbon technologies; and to developing the knowledge and skills to create jobs in this sector. A crucial part of this is maximising the potential of the low carbon vehicle industries and our business development team at the council are working with new and existing businesses in the sector to help them grow. We have approved planning changes to make it easier for low-carbon businesses to set up in the low carbon Enterprise Zone, as one of many incentives to persuade businesses that Sunderland is the best base for them.

AI: What are some of the challenges you face in trying to convince people to switch from regular fueled cars to electric or hybrid vehicles?

Watson: One of the key issues for people thinking about making the change is the accessibility of charging points for electric cars. Research by Newcastle University shows that four of the five main barriers to EV purchasing relate to charging anxiety.The North East has the biggest network of charging points in the UK, and in Sunderland, we have 50 public and private points. In Sunderland, 99% of all residential, industrial and retail developments within the city boundary are within a 1.5 mile radius of a charging point and 90% are within one mile