Opportunities in the UK Automotive Supply Chain
As the MD of a UK injection moulding specialist, I have always been a strong advocate for the reshoring of moulding work. This has culminated in my participation on a specialist panel on this subject at the recent SMMT International Automotive Summit.
Now in its ninth year, the purpose of the Summit is to provide a platform for the UK automotive industry, government and media to discuss the opportunities and challenges facing the industry.
My personal contribution (six minutes into the below video) formed part of a streamed session focussing on reshoring supply chain and UK content. Leaving the European Union will obviously have profound implications for the domestic supply chain. The purpose of our panel was to evaluate how to promote the right conditions for reshoring, as well as exploring key issues around the country-of-origin of components and vehicles.
Key areas of discussion focussed on recent improvements in the ‘local content’ of vehicles produced in the UK:
– UK Automotive turnover is up 9.0% on the previous year, now being at a record £77.5 billion, contributing £21.5 billion to the British economy and employing 814,000 people.
– Cars manufactured in Britain are becoming more British, a recent supply chain study showing that 44% of all components used by UK car makers now come from domestic suppliers, compared with 41% in 2015. Compound growth is actually much higher than this, as car production levels increased by 38% during this period.
You can read the full SMMT Report by using this link – Sustainability Report
But are these findings reflected in the ‘real world’?
My own company, like many others, is ‘second tier’, so we rely on additional work ‘filtering down’ from the bigger and more specialised automotive groups.
Having recently exhibited at the Automechanika show at the NEC, it was very encouraging to hear that a large proportion of first-tier companies are aggressively looking to increase the UK sourced content of their products.
Whether currently importing plastic products from Europe or the Far East, the prospect of trade restrictions resulting from a ‘hard’ Brexit, coupled with a weaker Pound were quoted as the major contributors to this trend.
There also appears to be growing pressure from UK based automotive OEMs. They are looking to tighten the guidelines when it comes to UK content, it no longer being acceptable to assemble out-sourced components and claim that the finished item was made in the UK.
Increasing levels of automation, reduced lead times and lower transportation costs mean that UK manufacturing companies are more competitive than ever before. The challenges ahead of us also offer great opportunity, so we need to be ready to face them.
View the video of the SMMT Reshoring Supply Chain & UK Content Panel
Simon Anderson, Managing Director, LVS Small Plastic Parts
