Representatives from the UK automotive supply chain and global car manufacturers have been discussing ways to reduce the current gap in the UK supply chain, worth at least £3 billion, at today’s SMMT International Automotive Summit.
Delegates representing a range of automotive component and materials suppliers, as well as OEMs with manufacturing facilities in the UK, identified a number of factors that are limiting growth of suppliers.
According to research undertaken by Jaguar Land Rover, 29% of UK-based SMEs list a shortage of skilled workers and apprentices as their primary reason for reduced growth and reluctance to pitch for larger contracts. Meanwhile, 18% of SMEs cited reluctance from investors as a key reason for slow growth.
Chris Gane, Divisional Managing Director at Caparo, suggested that it was the role of OEMs to combine their requirements so that SMEs are able to make investments based on larger contacts which would pose a lesser risk to financiers. Luis Olivié, Global Business Development Director at Achilles, suggested that OEMs would also be able to reduce supply chain risk and increase transparency by implementing supply chain mapping.
With an increased emphasis based on reducing risk, many manufacturers with UK-based manufacturing facilities are keen to seek out supply contracts from British suppliers. Investment in UK automotive manufacturing has experienced an upturn in recent years. In 2013/14 Jaguar Land Rover has increased its supplier spend by 70% compared to 2011/12; it believes that there is potential for this to increase by a further 50% by 2017.
