Supply chain finance on the bill at SMMT Summit

13 June 2013 #SMMT News

The profile of the UK automotive supply chain has shot up in recent years as government and industry focus their attention on the development of the domestic supply chain. Eating into the £3bn supply gap identified by the Department for Business, Innovation and Skills is the ambition of bodies like the Automotive Council and was a hot topic of discussion at the SMMT Summit.

John Leech, Head of Automotive, KPMG, explained that the UK is becoming increasingly attractive to global automotive companies and suppliers, a trend that is forecast to see the proportion of local content in the UK vehicle supply chain rise from around 36% today to around 50% by 2017.

Communication with financiers and suppliers is vital to see growth for vehicle manufacturers. Mike Mychajluk, Purchasing Risk and Supply Chain Sustainability Manager at Jaguar Land Rover, made this point, but also concentrated on the difficulties some companies are still seeing in terms of access to finance.

While some areas of the supply chain still find it difficult to get access to finance, Richard Hill, Head of Automotive at RBS Corporate Bank Division, made the point that now financiers are more understanding of the automotive business model, the demands on suppliers and the types of finance products that work. This change in the bank/business relationship is a positive step in the development and repatriation of the UK automotive supply chain.

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