Increasing road, rail, sea and air transport results in a greater burden on the environment, in terms of greenhouse gas and other emissions, industrial and consumer waste, and depletion of oil and other reserves. Road traffic in the UK is predicted to grow by 19% by 2008, and by 50-160% over the next 20-30 years.

Transport is responsible for around 22% of UK greenhouse gas emissions, which may increase by 25-50% over the next 10-20 years based on current trends, although government policy aims for a 20% reduction in CO2 emissions by 2010. The global warming that may be associated with greenhouse gas emissions could result in an average global temperature rise of between 1.5 and 4.5°C by 2050, which would have significant effect on quality of life and economic activity.

Clean air is an essential ingredient of good quality of life, with implications for people ’s health, particularly respiratory diseases. Continuing legislation, technological developments and progressive replacement of the vehicle fleet by more modern vehicles will reduce vehicle emissions to less than 20% of their 1990 level by 2010, although increasing transport demand and congestion will have a counter effect. Longevity of vehicles inhibits the quick take-up of newer, more environmentally friendly technologies.

Fossil fuels supply 98% of transport energy demand, with world oil demand growing at between 1.1 and 2.7% annually. Estimates vary, but it is predicted that conventional oil supply may peak sometime in the next 15 years or so, after which demand will outstrip supply. In addition, there are uncertainties about the unstable production situation in some producing countries due to international events. The environmental and commercial pressure for alternative energy systems will increase, leading to a number of competing alternatives (for example, bio-fuels, electric motors and batteries, hybrids, hydrogen internal combustion engines and hydrogen fuel cells).

End-of-life vehicles account for 1.8 million tonnes of waste in the UK each year. The rising cost of landfill, together with European legislation on recycling and waste disposal will have a positive impact on vehicle design, manufacturing, financing, maintenance and dismantling.

Currently road transport is heavily dependent on oil as a primary fuel source. However, within a 20 year time horizon the natural reserves of conventional oil may not be able to keep up with the estimated increase in demand. Activities are concentrating on reducing fuel consumption of conventional vehicles, together with developing alternative energy and power systems, such as hybrids, electric and alternatively fuelled vehicles. Hydrogen and fuel cells are of particular importance, although it is likely to be 15-20 years before such systems become widely available. The large investment in fuel distribution infrastructure required is a significant barrier to widespread adoption for many alternative fuel solutions. Nevertheless, small scale use of hydrogen as a vehicle fuel can be expected to progressively increase.

The performance of electronics and communications technology is rapidly advancing, in terms of processing speed, miniaturisation, cost and functionality, driven by Moore’s law (and the International Semiconductor Industry Roadmap). The content of electronics and software in new vehicles will continue to increase, in areas such as control and intelligence, telematics, information and service provision, entertainment and user interfaces. Many of these functions will require parallel development of the infrastructure to enable communications and system-level control. The development and agreement of international standards is a key enabler.

Developments in materials technology can provide a number of economic and environmental benefits, in terms of reduced weight and material consumption, increased strength, reduced energy consumption and increased vehicle performance. New materials technologies of interest include lightweight alloys and polymers, fluids, coatings, biotechnology and nanotechnology.

Effective manufacturing and management processes and systems are a key competitive factor in the automotive sector, in terms of both efficiency and effectiveness. Of particular importance are processes associated with research, design, new product development, manufacturing and service provision. Newer flexible, manufacturing technologies have the opportunity to service different industry sectors and provide better returns on investment. The UK has particular strengths in design and value-added engineering services, although significant shortages in skilled engineers, scientists and technologists are predicted.