NAA Event Review: How the North West can gain maximum economic benefit from the current investment in the UK’s automotive industry
Key points from the Automotive Sector update event for the Public Sector and NAA Business Excellence Consultants, 30 January 2013, Haydock:
- There is a significant immediate, but a relatively short, window of opportunity to realise the opportunities to grow the UK automotive supply chain
- In the UK we make 10% of the vehicles that are made in Europe, but only 2.5% of parts that are made in Europe
- OEMs would like to buy £3 billion worth of tier one parts in the UK, but they can’t
- Many tier 2 suppliers present their businesses poorly; instead they should make every effort to portray the most professional image possible.
Over the next 18 months the Automotive Sector in the UK will invest over £5.6bn in new facilities, and the Automotive Council has identified over £3bn of UK sourcing opportunities.
The automotive sector is of considerable importance to the North West region’s economy, as it is the UK’s largest vehicle producer and contributes over £10bn to the UK economy. Nationally, the sector is valued at £50bn.
An event was organised by the NAA to review these unprecedented opportunities and look at how the UK and the North West region can overcome the challenges to maximise growth of the sector.
Presentations were given by the Society for Motor Manufacturers and Traders (SMMT); the Department for Business, Innovation and Skills (BIS); and the Northwest Automotive Alliance’s ERDF-funded Business Excellence programme. Companies operating in the automotive sector in the North West presented a number of case studies showing how support from the NAA’s Business Excellence programme has helped them to successfully develop their businesses. The aim was to maximise public and private engagement in order to capitalise on the economic opportunities from the automotive industry.
Following an introduction from NAA Chief Executive Carol Holden, the first speaker was Yung Tran, Head of Member Services and Business Improvement, SMMT. Yung’s main message was that the industry had a strong year in 2012 but we should not be complacent – there will be challenges to overcome in 2013. Industry needs to continue working together through the Automotive Council, SMMT, and organisations such as the NAA, to ensure we maximise on the opportunities and continue the momentum going forward.
Yung believed that there’s around 12-18 months to realise the opportunities in the UK, or the supply base would be sourced overseas. Exports also represent important potential for UK automotive suppliers.
Access to finance has been a barrier to growth of the supply chain in the UK, especially the relationship, and the lack of understanding, between the banks and the sector. However initiatives, including the running of various events, were being put in place by the SMMT and other organisations to address such issues.
Philip Davies, Automotive Industry Analyst, Local Growth Directorate, BIS, and representing the Automotive Council, also stressed the opportunities for the automotive sector in the UK – and especially in the North West.
Although vehicle manufacturing is doing well overall in the UK, the same is not true of the supply chain – we have a large trading deficit in terms of parts. In the UK we make 10% of the vehicles that are made in Europe, but only 2.5% of parts that are made in Europe; this is an opportunity.
OEMs would like to buy £3 billion worth of tier one parts in the UK, but they can’t. Phil suggested that now is time for suppliers to talk to their customers and say what they can offer.
Phil’s closing comment was that he believed one of the most important issues for Tier 2 suppliers was presentation; many tier 2 suppliers present their businesses poorly and they should make every effort to present the most professional image possible.
Following the presentations from the SMMT and BIS, Steve Williams from Performance Springs and John Ellis from MWS both talked enthusiastically about the support that the NAA Business Excellence programme had given their businesses.
You can view the presentations from the event on the NAA website:
