All the latest news from the SMMT: Government highlights £3bn automotive supply chain opportunity
The Society of Motor Manufacturers and Traders (SMMT) has welcomed the launch of a new industry-wide supply chain commodity survey that identifies more than £3bn of opportunities for domestic automotive suppliers and overseas companies wanting to invest in new facilities in the UK.
The government survey identifies key components that vehicle manufacturers are looking to source in the UK to support new and existing model programmes.
Published by the Department for Business, Innovation and Skills (BIS), the survey is a positive output from the Automotive Council, highlighting the significant commodity opportunities in the UK, valued at more than £3 billion per annum and indicating priority areas for growth in the automotive supply chain.
The findings from the full report identify a wide range of vehicle manufacturer commodity requirements, summarising the opportunity by component together with an estimated total value. Engine castings and forgings, steering systems, trim interiors, vehicle upholstery, electronics and tyres are just some of the most highly sought-after components by UK-based vehicle manufacturers named in the report.
“The latest Automotive Council commodity survey demonstrates the value and scale of opportunities available to the UK supply chain,” said Paul Everitt, SMMT Chief Executive. ”For some of the most highly sought-after components, significant supplier capability already exists in the UK, but for others, continued inward investment is required to ensure that UK suppliers can meet demand and close these valuable sourcing gaps. A strong and successful supply base is essential to ensuring the future prosperity of the wider automotive industry, and SMMT, through the Automotive Council, will continue to support activities that strengthen supply chain capabilities in the UK.”
While the latest survey focuses on current commodity sourcing opportunities in the UK, the global transition to low and ultra-low carbon technologies and fuels provide the UK supply chain with a wealth of new growth opportunities. As part of the next steps following the report, the Automotive Council will actively pursue this £3bn of new business opportunity, raising awareness of the scale of demand and facilitating engagement with potential suppliers. These will include existing UK-based automotive suppliers, domestic suppliers in other sectors looking to enter the automotive market and overseas-owned companies and investors.
Click through to download the Growing the UK automotive supply chain: the road forward – 2012 update from the Automotive Council website.
SMMT is already working to help build new and strengthen existing relationships between UK-based vehicle manufacturers and component companies. In July, more than 20 UK vehicle manufacturers and Tier 1 suppliers gathered at SMMT’s ‘Meet the Buyer’ event to meet 100 automotive component companies, seeking to source more locally produced parts. With over 300 one-to-one meetings taking place on the day, SMMT’s ‘Meet the Buyer’ event is the largest business networking event of its kind.
The UK automotive supply chain – key facts:
- The UK automotive supply chain typically generates £4.8 billion of added value annually.
- The supply chain represents about 40% of the retail price of a passenger car.
- The combined UK purchasing spend of UK-based automotive, commercial vehicle and yellow goods manufacturers is £8.4 billion per annum, increasing by £1 billion in the last year. The amount purchased in the UK equates to approximately 36% of their global purchasing spend.
- The UK supplier spends on average £36 million, of which 46% is spent in the UK.
- Of all UK suppliers, over 70% manufacture their products in the UK.
- At present, about 80% of all component types required for vehicle assembly can be sourced from UK suppliers.
- Around 2,350 UK companies regard themselves as ‘automotive’ suppliers, employing around 82,000 people.
It is estimated that every job in the vehicle assembly supports 7.5 elsewhere in the economy.