A new Automotive Council report has highlighted a new £2 billion growth opportunity for component suppliers as UK car makers enjoy an unprecedented period of success. The report, released at the SMMT’s recent Open Forum event in Solihull, assesses the ‘re-shoring’ potential for ‘upstream’ automotive suppliers — in other words, the capacity for the UK to increase the local supply of components and raw materials that are currently imported.
The £2 billion figure comes on top of £3 billion identified last year for supply direct to vehicle manufacturers. Industry experts point to the accelerating growth potential in the automotive sector, as well as local-sourcing benefits of lower logistics costs, greater flexibility and faster response times.
SMMT chief executive Mike Hawes (pictured) said: “We want the UK supply chain to capitalise on the renaissance in UK vehicle manufacturing, but continued Government support through the Automotive Council is still required, particularly in facilitating access to finance and stimulating innovation — areas in which many companies are still encountering problems.”
Currently, around one third of the components in a UK-built vehicle are sourced in the UK. The report identifies a realistic aim to increase this local content to around 60% — similar to other European countries such as France, Germany, Italy and Spain.
Business Minister Matthew Hancock said: “The automotive sector is thriving, and our supply-chain firms are helping to create jobs and generate growth, but there is more to be done. That is why last month we announced £10 million of Government money to address skills shortages in the auto supply chain to help UK companies win more contracts.”
UK suppliers looking to expand their sourcing activities can attend the joint SMMT/UKTI Meet the Buyer event on 12 May (for more details, e-mail: ). Automotive companies seeking local content supply can also take advantage of SMMT’s Automotive Supplier Finder — a comprehensive database with over 4,000 categories for automotive products and services.