Exciting cars which look like nothing else on the road but put together for a fraction of the cost of traditional models could be the future of the Midlands automotive industry, writes John Revill...

From the projects that hail from the bedrooms and garages of the enthusiast lie the seeds of the Midland automotive revival.

While the recent Ryton and Ellesmere Port cutbacks and closures point to harder times ahead, there are signs that the Davids are getting their acts together to run alongside the Goliaths of the global automotive industry.

Longbridge may have shut down, along with Jaguar's car-making operations at Browns Lane, but there are companies out there still making cars.

These are the little guys, the so-called niche manufacturers who generate an estimated #300 million for the West Midlands every year.

At present around 20 per cent of all employment in the West Midlands automotive sector - around 10,000 people - are thought to be connected to niche and specialist manufacturers in one way or another.

And in the coming years, it is going to get bigger. Much bigger.

As well as Aston Martin - produced at Gaydon and part of the Ford empire - and VW owned Bentley, which are both enjoying great success, many of the even smaller players are also making inroads.

One of the firms involved is GTM, the Coventry-based maker of the 135mph Spyder, 150mph Libra and the limited edition - only 15 cars per year - Ballista cars.

The company's parent, RDM, was set up by former Rover engineer David Keene in his spare bedroom after he left Rover in 1993.

The firm has now grown to an operation employing 37 people and has so far produced 450 of its cars with ambitious plans to increase production.

It is also in talks to open up its own dealer network, with its cars being sold at ten locations across the country.

Mr Keene said: "I used to work in the special projects division of Rover, where we had to look at the normal cars and work out how we could make special derivative versions, which would all be produced at a low volume.

"Every single vehicle produced we looked at creating new versions off the same platform; we created the MG R V8, which was the predecessor to the MG TF, which sold 2,000 models.

"We created a jazzed up version of the Land Rover Defender, and called it the Stormin' Norman.

"When I went back to the mainstream production, I didn't want to do that any more; I had seen the opportunities."

Mr Keene left Rover to set up RDM, which he initially ran from his bedroom, but has now grown into a business which makes 50 cars - which range from #19,000 to #34,000 - a year.

It is now planning to quadruple that figure, helped by the link-up with dealers who will sell the cars which were previously sold through mail order, magazine advertisements and the internet.

Mr Keene said: "People like niche cars because they want something which looks different, not the sort of thing you see of the road normally.

"The sort of thing that other road users will see and go 'blimey, what is that?'

"People are very used to getting into Mondeos, Golfs or Audi A4s, but they are a bit boring - everyone has got one.

"This is a growing market; you can tell because lots of the big manufacturers are trying to get into it by making lower volumes of more customer specific products.

"That makes things harder for us, but we look forward to the challenge."

While RDM may have started off life in a spare bedroom, Westfield, which is celebrating its 25th anniversary next year, started out in the garage of the founder Chris Smith at his house in the village of Armitage, outside Lichfield.

The company, which takes its name from Mr Smith's house, makes 350 cars - all to the customer's orders.

Mr Smith's son Richard, who is commercial director of company, said: "It all started off with my father's enthusiasm for racing. He used to love driving around in Lotus 11s, but they were getting expensive so he built himself a replica.

"He started out in his own garage, and moved to a small unit in Netherton. It eventually came to Kingswinford."

The company now employs 54 people at its 37,000 sq ft base in Kingswinford, Dudley. Sales are now 16 per cent up on last year, generating around #4 million.

Richard Smith said: "I really don't think the UK automotive industry has a great deal of choice other than to go niche with the big boys disappearing. We can survive because we are not competing with China and India, who are not interested because we are not making massive volumes.

"And it is down to the quirkiness of the models. If you want a proper car without a roof, people will buy a Mercedes or a Mazda MX 54, but if you want something different, you go for a niche car.

"If you want something a 135hp touring car to go to Italy or something that will go from 0 to 100mph in seven seconds we can produce it."

A relative newcomer to the sector, which also includes Morgan, Connaught and Pro-drive, is West Bromwich plastic thermoformers Team Spatz.

The company, which employs 28 people, is currently getting its 135mph Zolfe Orange ready for production after a prototype was shown off at this year's Autosport show at the NEC in January.

Nic Strong, managing director of Team Spatz, said: "This is just a punt for us into the automotive industry.

"We messed around to see if we could produce a racing car ourselves. From the clay model it took us three weeks.

"It was that fast because we are a specialist in rapid prototyping and problem solving."

Dozens of potential orders have already been received for the car, which will be launched later this year, Mr Strong said.

"We are really excited about this project."

So how do these manufacturers cope with the challenge of competing with the massive manufacturers like Ford and Toyota who spend an estimated $1 billion on launching
a new vehicle?

Mr Keene said: "At GTM we have about #4.50 and a luncheon voucher to spend. But it is about being clever and using elegant ways to develop vehicles that you can get on the road for the minimum cost and which have the maximum impact.

"A lot of the work we do is by hand, while new technology has brought the cost down. Realistically, we spend around #250,000 developing each car."

GTM keeps the costs down by using components which have already been designed and tested by larger firms.

"Buried underneath our cars are parts of ordinary cars on the road. Ford spend millions designing and producing a product and then testing it to death.

"What we do is adapt these components to our design, which means we have a lower cost base and high reliability.

"The cars just don't break or go wrong and, when the owner comes to service the car, there are common parts.

"But when we package them together they are covered by our parts so they look different, and of course the exterior is all our own design."

GTM, for example, uses a Duratec V6 engine, which is the the powertrain featured on the Mondeo ST 220, although on the GTMs it is used to drive the cars at speeds approaching 150mph.

Mr Keene said: "Niche vehicles are definitely the way forward; we are not that great in the UK at making mass-produced vehicles, but we have all the skills to make specialist cars. Britain is a centre of Formula One for example, we are fantastic at that. There are 215 vehicle manufacturers in the UK alive and well.

"Some of them may be building cars in sheds, others will have big factories.

"We have the components suppliers in the Midlands as well. If I need a part or a piece of metal lasered or bent, within ten miles of our HQ I can get it."

Eventually this could lead to the original equipment manufacturers, the traditional carmakers, approaching the niche firms for their expertise.

"They are not very good at low-volume specialist work, but we can offer them a service," said Mr Keene.

"We will be able to design and develop cars for them to produce under their own badge."

A niche vehicle network has already been set up to co-ordinate the activities of the manufacturers and components makers, with member-ship increasing by a third to 35 firms this year.

They all get together to pool their skills and capabilities, and offer help and advice in areas such as exports and design.

A motorcity in the West Midlands could also be set up to provide a home for many of the firms where they can work together.

"This is the way to go. Niche vehicles are getting together and pooling their resources," said Mr Keene.

Viv Stephens, automotive policy manager at Advantage West Midlands, said: "In terms of low-value manufacturing, that is going to disappear to low labour cost countries.

"But niche manufacturing - anything up to 100,000 cars per year - has a good chance of staying here. Land Rover, Bentley and Mini are doing very well at the larger end, aiming at people who want something different and are prepared to pay a premium.

"There is lots of scope for the smaller guys in the Midlands as well. We have the skills and abilities and all the suppliers to make it happen.

"The Midlands has a history as a hot-bed for the automotive industry; there are still 1,777 automotive companies in the region and lots of technology companies. We also have facilities such as the University of Warwick in engineering and the University of Coventry in styling and design who produce the graduates to work in this area."

John Edwards, Advantage West Midlands chief executive, said: "For a long time, the focus of manufacturing has been towards high-value added goods and products so it is not surprising to see the niche vehicle market expanding.

"Any developed economy is going to struggle against low-cost labour economies so it is vital we look to other strengths such as high-quality design and engineering.

"This is something Advantage West Midlands and our partners recognised long ago which is why we have invested millions into helping the smaller but increasingly significant manufacturing outfits in our region.

"While you're less likely to pass a GTM Ballista or Connaught Type D while driving along the A38 than one of the famous brands, you're far more likely to take sit up and take notice if you do."