Software Defined Vehicle: growth and value creation opportunities for the UK

The automotive sector is an economically important sector for the UK, generating over £85.4 billion annual turnover and supporting about 830 000 jobs [1]. 77% of the cars made in the UK are exported [2]. However, this sector is susceptible to competition and technology disruption, particularly from Chinese OEMs (Original Equipment Manufacturer) who are aggressively entering the European market, and from US fleet operators that are targeting the fully automated transportation fleets sector. While the technologies underpinning these disruptive forces, such as electrification, autonomy and connected cars, have been mostly developed outside of the UK, contemporary technology developments arising from Software Defined Vehicle (SDV) offer economic opportunities that the UK is particularly well placed to exploit. Our objective in this brief report is to examine the readiness of the UK to embrace this opportunity, and to map a potential sectoral strategy to catalyse this opportunity. Specifically, this report considers the impact of SDV on automotive sector value creation, the key building blocks of an SDV economy, and how UK stakeholders can be utilised to exploit the SDV transformation.