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Launch of BMW Mini Clubman

The Rt. Hon. Stephen Timms MP,  Minister for Digital Britain, also Financial Secretary to the Treasury
Oxford ,  11 September 2007

Oliver [Zipse – Plant Director], Ladies and gentleman, honoured guests. I am delighted to be here this morning and to join in the celebrations for the launch of this great new model, the MINI Clubman.

It is getting on for a year since Gordon Brown came to mark the launch of the new MINI itself. I think he would reflect on the twelve months since then fairly positively from a personal point of view. I am delighted that business here is similarly going from strength to strength – for the MINI brand and this plant in particular, and for BMW in the UK more widely.

The new model shows all the signs of being yet another winner. The old ‘Clubman’ was of course an icon, with a special place alongside the Morris Traveller in the hearts of the motoring public, recognisable the world over. The new model looks like it repeats what was achieved with the MINI itself. My first car was a Mini. BMW has succeeded in updating the brand for a new generation, adding value and quality but producing unmistakably a MINI, keeping key parts of the DNA – and a bit of the quirkiness too.

The BMW Mini has been a stunning success – from somewhat uncertain beginnings in 2000 to production of the millionth model in April this year, export of cars to 80 countries around the world, and the definition of a whole new market segment. Truly a tribute to both the excellence of the original vision, and to the quality of its execution from the boardroom to the shop floor.

And, I would say, a shining example of the modern manufacturing success that this country can deliver, with the right leadership, and the right investment in products and people.

I have family in Singapore and have been a regular visitor to Malaysia over the past 20 years. There was a time when the only British made family cars you ever saw in Malaysia were wonderful old Morris Minors and Morris 1100s. Even they have now almost all expired. But suddenly, with the MINI, a whole raft of new British family cars are in use – and that success with the MINI for BMW and for UK auto manufacturing is being repeated right around the world.

And it is not just a success story for Oxford. [As previous speakers have said,] the success is down to the integrated ‘production triangle’ with Swindon Pressings and the Hams Hall engine plant near Birmingham. And I’m delighted that wider integration with the UK-based suppliers has also increased with the new model – now up to 60% of parts by value.

BMW is a cornerstone of the UK automotive sector. The 3rd largest car producer in the UK, employing around 8,000 people and spending over £1 bn per year with UK suppliers.

And I make no bones about describing BMW in those terms. It is a German company making an immense contribution to the British economy, and one we are proud of. In today’s global economy – and particularly in a sector as globally competitive as automotive – nationality of ownership is largely irrelevant. What matters – certainly what matters to this Government – is to create a business environment that makes world-leading businesses like BMW invest and grow here – and, of course, create large numbers of high quality jobs.

So I hope Oliver [Zipse – Plant Director] understands what I mean if I say I regard BMW as a ‘good British company’.

Of course – and with apologies - UK automotive success extends beyond BMW. The sector has in recent years had its fair share of problems – and those problems have attracted plenty of press and political interest. But let’s put those into their proper context.

In recent years:

• overseas firms like BMW have invested over £7 billion in the UK;
• seven of the world’s largest car makers manufacture here, more than in any other European country;
• around 210,000 people are employed in UK automotive manufacturing;
• and the UK automotive industry is ranked 7th largest in the world and 4th largest in Europe.

Annual car production figures have taken a knock from recent high profile closures. But growth elsewhere in the sector – including here – is already starting to re-gain some of the lost ground and by the end of the year annual numbers look likely to be back above 1.5m. In the early 1980s it was little more than half that.

This is not an industry in decline. It is one that is succeeding in competing even in the toughest of competitive conditions on the basis of, amongst other things, a highly-skilled, highly flexible workforce and on the excellence of its design engineering.

If Oliver and his colleagues will forgive my mentioning a competitor by name, General Motors’ decision to allocate production of the next Astra to Ellesmere Port – in the face of the stiffest international competition – just shows what can be achieved when industry, Government and, critically, the workforce are pulling together. And we want to continue to attract new models and new products to the UK.

This is actually a pretty good month to be arguing the case for UK manufacturing, with both the Engineering Employers Federation and the Chartered Institute of Purchasing and Supply last week reporting strong growth. I have been visiting manufacturing plants around the UK over the past few weeks to see the current positive picture for myself. Positive investment trends and, according to the EEF, the fastest growth in output since 1994 despite incredibly difficult exchange rates – especially, as automotive colleagues will be all too aware, against the Yen and Dollar. It speaks wonders for the progress UK manufacturing has made in adapting to globalisation and the rise of low cost competition. This Government believes in manufacturing, and we want what is now being recognised as success to be long lasting and to be developed much further.

That means there can be no room for complacency. UK manufacturers have had to make enormous efforts to retain their competitiveness and I recognise, in particular, the importance of investment in innovation and the skills of their people. And Government has an important role in both those areas.

Innovation will continue to be key, not just to maintaining competitiveness, but also to addressing other fundamental challenges. Climate change is one of the most critical, and I know the automotive industry in general – and BMW in particular - fully appreciates the need to contribute fully to reducing carbon emissions.

There is a specific MINI achievement to trumpet here. Reducing CO2 emissions to only 104 grams per kilometre with the new MINI Cooper Diesel is very impressive, and sets a key challenge to competitors.

There is concern in the sector at the moment about the proposals we all await from the European Commission on the regulation of CO2 emissions from new cars. We are still at a very early stage of the debate on that. The UK will want to see targets that are demanding, and that deliver real environmental benefit. But we will also argue for a proportionate approach that sets achievable targets and takes account of both the diversity of the sector and the reality of the marketplace.

And we will also continue to support investment in the UK, in innovation to help businesses rise to the challenge.

We have improved and extended the R&D Tax Credit to promote investment and stimulate innovation. The credit has provided £1.8 billion in support for businesses, supporting £16.6 billion worth of R&D expenditure. We’ve also doubled in real terms the budget for UK world class Science and Research, with a particular focus on helping industry draw on a strong science base.

We have invested £370 million into the Technology Programme to enable manufacturers to capitalise on emerging technologies; turning ideas into marketable products. The programme has contributed to over 600 projects across 40 technology areas, with a combined business and Government investment of more than £900 million since its launch in 2004. The spring 2007 competition provided for £40 million worth of support for advanced manufacturing projects – including design engineering technology.

And its all contributing to the positive picture we can celebrate today which the MINI Clubman epitomises.

For the automotive sector specifically, as part of a wider £45 m programme of support, we have invested £13 m to establish two Centres of Excellence in the areas of low carbon technologies and fuel cells and in Intelligent Transport Systems.

And we announced in the Energy White Paper the establishment of an Innovation Platform for Low Carbon Vehicles, which will provide up to £30 million of support for innovation in this area from this year. I expect a further announcement soon from the newly independent Technology Strategy Board on that significant initiative.

So my message is that this Government is committed to supporting continued success in UK manufacturing, and in our automotive sector in particular. Current success reflects enormous efforts by many, many people, including many in BMW – and those efforts will need to continue. We will need to play our full part in Government in supporting the sector. And it is great to be able to pass on that message at an event marking the launch of a product that exemplifies so many of the best aspects of UK manufacturing success.

Oliver, Ladies and gentleman, honoured guests, thank you for your invitation to be here today to mark this important occasion. I wish you, Oliver, and your colleagues every success in making the new Mini Clubman another global success.

Thank you all very much.