Automotive Council publishes new report on growing UK auto supply chain
Fri 28 November 2014
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A new report from the Automotive Council seeks to assess and improve the competitiveness of the UK automotive supply chain. It builds on earlier research in evaluating the potential for the growth and development of Tier-1, Tier-2 and Tier-3 suppliers.
Key findings of the report are that the the UK automotive parts trade deficit is driven mainly by vehicle manufacturer purchasing, along with a significant contribution from Tier-1 purchasing. For both OEM and Tier-1 purchasing, the majority of imported goods are sourced from countries that are not regarded as ‘low cost’, such as Germany, France and Japan.
Upstream UK suppliers are capturing about one third of demand at Tier-1 level. However, at every level in the automotive sector, the report says, there is a willingness to purchase more from the UK, subject to the availability of a competitive source of supply.
The main reasons for not purchasing more from the UK are a lack of suitable suppliers in the UK, or a lack of suppliers with the necessary capacity and/or technical capability.
Many in the UK supply chain feel, though, feel confident about the near term future with over 80% of survey respondents expecting growth in their business.
Based on the findings, the authors propose the following recommendations:
1. The high value import commodities should be investigated to determine the feasibility for increasing UK sourcing.
2. Specific support should be given to SME supply chain companies to grow their long-term competitiveness in line with the six themes identified in the Automotive Industrial Strategy.
3. Identify successful suppliers with the potential capability to be competitive and help them to grow through export support mechanisms.
4. Further develop the process of matching buyer and seller through targeted ‘Meetthe Buyer’ events focused at a cross-sector commodity level.
5. Encourage more entrants to automotive from other sectors through cross-sectorengagement, particularly for premium and high-technology product manufacturers within the aerospace, marine and motorsport sectors.
6. Develop a network of SME supplier best practice clubs using an industry standard framework for benchmarking and non-competitive collaboration.
7. Continue to work with the Finance community to develop a common understanding of the needs of SMEs and look to develop targeted solutions, such as funding for tooling.
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