Guest post by Viktoria Lamprinaki, Centre for Business in Society

Climate change, business scandals and changes within environmental regulation have pushed environmental sustainability high up the agenda of the automotive industry.

At the Automechanika Birmingham 2018 trade event, various stakeholders of the automotive industry discussed how current issues are affecting the industry’s future. This blog discusses the environmental challenges facing the automotive sector, considers the role of SMEs in meeting these challenges and outlines a PhD researcher’s experiences of visiting Automechanika 2018.

The industry

The automotive industry has been characterised as having a continuing and significant impact on the environment, which in turn has repercussions in other sectors[1]. The environmental implications of the current and future growth of this industry have attracted substantial research² and it is not surprising that it has experienced significant pressures in recent years due to the impact of its activities on the environment³. Automotive production processes generate important environmental impacts in terms of material, energy and water consumption, polluting emissions and waste disposal⁴. These factors are associated with high costs, which makes it particularly important to control them.

According to the Society of Motor Manufacturers and Traders (SMMT)⁵ the automotive industry is a vital part of the UK economy accounting for more than £77.5 billion turnover and £18.9 billion value added. With some 169,000 people employed directly in manufacturing and in excess of 814,000 across the wider automotive industry, it accounts for 12.0% of total UK export of goods and invests £4 billion each year in automotive R&D. In the last 15 years, the automotive industry has made huge strides in reducing the environmental impact of its products throughout the life cycle. Since 1999, improvements in production processes mean energy used to produce vehicles is down 19%, water use has been cut by 35% and 91% less waste enters landfill sites. Average new car tailpipe CO2 emissions have also been slashed and are down 31% over 15 years ago.

Small and Medium-sized enterprises (SMEs)

SMEs often show a lack of interest in their responsibility to protect the environment^6,7 therefore little attention has been given to their environmental activities^8,9,10. This ‘neglect’ is quite remarkable given that SMEs make up almost 90% of the businesses worldwide¹⁰ and it is estimated that they produce 60-70% of the total pollution⁹.

SMEs are an essential part of the automotive industry. There are over 2350 companies in the UK operating in the automotive industry, of which the majority are SMEs in the supply chain and aftermarket. The current competitive pressure on costs and the cumulative effect of the legislation have an impact on SMEs within the industry.

Despite the importance of environmental responsibility, how the stakeholders and each company’s resources affect the choice of environmental activities has not been considered in the context of SMEs within the UK automotive industry. That is also the case when it comes to using indicators as a managerial tool. This leads to some interesting questions concerning SMEs within the UK automotive industry:

1. How do stakeholders influence their environmental strategy?
2. Are SMEs limited resources a constraint?
3. How do they measure their environmental performance?
4. Is environmental strategy linked with the environmental performance?

Automechanika Birmingham 2018

Automechanika Birmingham is the largest automotive trade event in the UK held in association with the Society of Motor Manufacturers & Traders (SMMT). The event is an exhibition targeted at the vehicle production industry and the automotive aftermarket. In 2017 more than 800 quality exhibitors and 12000 key decision makers attended, 9300 from the automotive aftermarket and 2700 from the vehicle production sector. This year’s event was 70% bigger, hosting over 800 quality exhibitors, and the UK automotive trade event welcomed over 12000 visitors including motor factories, workshops, retailers, dealerships, vehicle manufacturers, and tier 1 and 2 manufacturers, who had opportunities to learn, discover and network.

What did I do there? Well, for three days from the 5^th of June I spent around 8 hours per day walking all the 34,015 m² (4 different exhibition halls) of the exhibition, to talk with different firms, industry associations, charities, specialists, non-specialists and visitors about my project.

It was a wonderful opportunity to meet people and engage with them regarding my project on the environmental sustainability of automotive SMEs. The whole experience was amazing. A vibrant atmosphere with people happy to talk about their products and services, as well as the future of the industry. Apart from the individual effort to contact people, the organisers of the exhibition offered networking services and the option to arrange meetings in their business meeting lounge.

After Thoughts

Attending this year’s Automechanika was a great experience that gave a much needed boost to my data collection phase. The automotive industry can be a challenging field for PhD students to research. Networking with firms and practitioners has proven to be quite difficult. SMEs can be really difficult to identify and contact because of their size and lack of visibility. Therefore this event was a valuable experience that offered plenty of information and opportunities for networking.

People in the industry are concerned about changes in regulations and the impact these will have on their business operations. They are trying to manage these changes and ensure that they have the minimum possible disruption on their activities. Sustainability seems to be an important box on everyone’s checklist.  The industry, and especially SMEs, seem confident that impacts can be managed and solutions can be found when it comes to optimizing the relevant processes. On the other hand, one word seemed to be on everyone’s lips, somewhat wounding optimistic views of the industry’s future: Brexit.

References

1. https://www.smmt.co.uk/
2. Orsato, R. and Wells, P. (2007). The Automobile Industry & Sustainability. Journal of Cleaner Production, 15(11-12), pp.989-993.
3. Nieuwenhuis, P. and Wells, P. (2003). The automotive industry and the environment. Boca Raton, Fla.: CRC Press.
4. Okuno, K. and Bessho, T. (2001). Need For Environmentally Friendly Surface Modification Technology In The Japanese Automotive Industry. Surface Engineering, 17(5), pp.357-361.
5. Nunes, B. and Bennett, D. (2010). Green operations initiatives in the automotive industry: An environmental reports analysis and benchmarking study , Benchmarking: An International Journal, Vol. 17 Issue: 3, pp.396-420
6. Hillary, R. (2004), Environmental Management Systems and the Smaller Enterprise, Journal of Cleaner Production, 12 (6): 561–69
7. Hoffman, A., & Bansal, P. (2012). Retrospective, perspective and prospective: Introduction. In P. Bansal & A. Hoffman (Eds.), The Oxford handbook on business and the natural environment (pp. 3-28). Oxford England: Oxford University Press.
8. Aragón-Correa, J. A., (2008). Environmental strategy and performance in small firms: A resource-based perspective. (2008). Journal of Environmental Management, 86 (1): 88-103.
9. World Bank. (2018). World Bank Group – International Development, Poverty, & Sustainability. [online]
10. European Commission – European Commission. (2018). European Commission. [online]

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