The Automotive Industry in Hauts-de-France and the Growth of ‘Battery Valley’
Liz Demaison is a highly experienced inward investment professional and is a series of blogs, in which this is the first, we look at the experiences of leading European regions in those sectors which are driving growth in European economies.
In 2022, France manufactured 1.38m cars compared to 719,000 in 2020. In 2023, the French Government announced a target that France would manufacture 2 million EVs by 2030.
The French automotive industry is concentrated in Hauts-de-France (Northern France). The region has 3 OEMs and a considerable supply chain. Hauts-de-France is now positioning itself as Europe’s ‘Battery Valley’ and has put in place a strong ecosystem to support the wider automotive industry.
Hauts-de-France has:
- 3 OEMS (Toyota, Renault and Stellantis) operating 7 production sites.
- Over 200 tier 1, 2 & 3 equipment manufacturers with foreign investors including Lear, Federal Mogul, Gestamp, Faurecia and Dunlop
- Over 550 automotive suppliers, subcontractors, and service providers.
- 40,000 employees in the automotive industry and 16,000 at vehicle manufacturing sites.
Over the last few years, Hauts-de-France has attracted 4 major gigafactories:
- Automotive Cells Company – 40GWh by 2030
- Verkor – 40GWh by 2030
- Envision – AESC – 30GWh by 2029
- ProLogium – 48GWh planned output by 2030
With these four plants, France is set to become one of Europe’s major battery hubs behind Germany and Hungary.
Increasing Levels of Foreign Direct Investment to Hauts-de-France
The 2023 FDI report by Business France and the French regions highlights the Hauts-de-France region as the country’s second largest host region for FDI. It is ranked second nationally on the number of projects, just behind the Paris region, with 205 investment projects in 2022, up 50% from 2021. The automotive& equipment manufacturers represented 9% of all projects (the second largest sector after ‘trade & distribution’) and 11% of jobs regionally.
Nord France Invest, the investment promotion agency for the Hauts-de-France region provides a cohesive service to ensure the needs of the automotive industry are met locally and that new operations can be established quickly and efficiently.
A Joined-up Industry Ecosystem
There is a strong regional automotive industry ecosystem which includes some of the following areas of support:
Skills Development
Hauts-de-France provides training at every level for the automotive industry:
- Secondary school vocational programmes
- Technical schools
- Two-year university programmes in technical fields
- Vocational bachelor’s degree
- Business and engineering schools
Hauts-de-France has 24 engineering schools with specific training programs for the automotive industry including: IT, microelectronics, automatic control engineering; systems optimisation, computational mechanics and design.
Support for Innovation and R&D
Transalley is a recently established innovation park supporting a technology cluster and bringing together businesses, researchers, and sustainable mobility operators. The complex includes applied research laboratories, technology platforms and work space to encourage industry collaborations. The Institute For Sustainable Mobility & Transport (IMTD) is based on site and works closely with the Hauds-de France Polytechnic University (UPHF) to support innovation and R&D within the industry. In addition, the Gyrovia Test & Demonstration Track is based at Transalley. This test centre is available for R&D and for showcasing new technologies. The track also simulates urban traffic scenarios to demonstrate connected, automated, and autonomous vehicles.
A Strong Regional Automotive Association Connection Nationally & Within Europe
ARIA is automotive association which serves the Hauts-de-France industry, and which links in with other French regions through the National Automotive Platform and is a member of several European networks. In addition to networking, providing industry and business intelligence, ARIA support includes industry training and establishing buying groups. Innovation support consists of: helping businesses find partners, secure financing and launch R&D projects. ARIA can also help members connect with international partners.
Government Support
As well as Hauts-de-France’s considerable regional business support infrastructure for the automotive industry, this ecosystem is also set within the context of a programme of central government support for the electrification of the automotive industry.
This includes government subsidies for EVs which are currently €5,000 for most households and €7,000 for poor ones. By the end of 2023 it is expected that Chinse-made EVs are unlikely to qualify for these incentives.
The recent battery plants also received grants including:
- ACC - €680mn grant
- ProLogium - €1.5bn grant to 2029
As well as central government support for skills development, in October 2023, the French government launched calls for automotive sector innovation projects with €900m of investments available until 2026 for qualifying projects.
Conclusion
What the experience of Hauts-de-France shows is the importance of a joined up and comprehensive strategy build from existing cluster strengths and then adding skills, R&D, business support, finance and a consistent approach to inward investment marketing. This can mostly be achieved by local agencies and provides a route map for UK regions especially where wider programmes are in place such as Investment Zones or Freeports.
If you are interested in looking at your own inward investment strategy, structure or even trying to develop a targeting list of potential investors then get in touch with Mickledore at nwilcock@regionaldevelopment.co.uk