A report out
today (2 March) sets out for the first time details of the
manufacturing parts and products that car makers want to source
from the UK, but are not currently buying here. The report
identifies some of the reasons for this, where purchasing
decisions are made and where the UK has the potential capability
to meet this currently untapped demand.
Companies in the UK are already winning more than £7 billion of
work annually from vehicle makers. But there are clear
opportunities to grow this business.
Using data collected from vehicle manufacturers and supply chain
companies, the report identifies the opportunities with a new
purchasing wish list of interior and exterior vehicle parts from manufacturers.
The report was launched today by the Business Secretary during a
visit to Jaguar Land Rover (JLR) and supply chain company
International Automotive Components (IAC) in Halewood, Merseyside.
Vince Cable also welcomed today’s news that JLR’s Evoque, which
starts production in July backed by a government offer of support
of up to £26 million, has resulted in supply chain contracts worth
£2 billion being awarded to 40 manufacturers across the UK.
In addition, JLR are creating 1,500 apprenticeship places at
Halewood to build the Evoque. It is expected that the contracts
announced today will generate a further 5,000 new jobs in the
supply chain.
Dr Cable who also co-chairs the Automotive Council said:
“JLR’s news that it’s awarding £2 billion worth of contracts to
businesses in the UK to supply components for the Evoque shows
that the UK automotive supply chain is capable of winning major
contracts and creating vital jobs in the UK.
“Today’s Automotive Council report shows for the first time,
where the opportunities are, the parts that vehicle manufacturers
want to source here in the UK if they have the choice, and where
the UK has capability to supply those parts.”
The joint industry/government Automotive Council was set up to
address issues such as the need to reinforce and grow the UK
supply chain.
Co-chair Professor Richard Parry-Jones said:
"The automotive sector in the UK is seeing a resurgence
as global vehicle manufacturers increase their investments and
look to increase local sourcing.
“The supply chain is poised to benefit from these developments,
but it requires a concerted and co-ordinated effort, led by the
joint industry/government Automotive Council, to help realise this
potential opportunity.
“The publication of this report is a key step in making this happen."
The report was compiled by Dr. Matthias Holweg, from the Judge
Business School at the University of Cambridge. He said:
“This report will provide an important evidence base for both
vehicle manufacturers and suppliers when assessing what parts and
products to make, buy and sell.
“I was delighted to have good co-operation from the industry to
produce this report for the Automotive Council and I look forward
to seeing the potential opportunities for growth being realised.”
Notes to editors:
1. Growing the Automotive Supply Chain - the Road
Forward is available at www.automotivecouncil.co.uk.
2. The purchasing directors of 11 major UK-based vehicle
manufacturers (passenger cars and commercial vehicles) were
surveyed in order to identify which components are currently
sourced in the UK; which ones are not and why; and which parts
they would like to buy in the UK and are not currently buying. 140
suppliers responded to a questionnaire developed to cross-validate
these findings and assess the reciprocal views of the UK-based
automotive suppliers. Combining the results of the two surveys
identified which component groups provide the best match, both
current and prospective, between vehicle manufacturer requirements
and UK supply capabilities.
3. The total purchasing spend of the 11 manufacturer companies
surveyed is £7.4 billion, which accounts for, on average,
approximately 36 per cent of their global purchasing spend
(although the amount purchased in the UK, in relation to their
worldwide purchasing spend ranges from 11 per cent to 83 per cent
for the individual companies).
4. The main categories with untapped potential are:
‘interior and exterior parts which include headliners, carpets,
seats, instrument panels and HVAC units, glass as well as exterior
parts such as bumpers and large plastic mouldings;‘powertrain and
body’ parts including suspensions, castings, forgings and
transmission components; and,‘electrics and electronic’ parts
which includes power steering, engine control units and
alternators.
5. The study also looks at issues holding UK suppliers back. In
addition to pinpointing new work that manufacturers would like to
source from the UK, the report also identifies that, contrary to
popular belief, even lost contracts need not necessarily be lost
for ever. A third of recent contracts that left the UK went to
manufacturers in Western Europe rather than low cost economies.
Overall this too is positive as this represents business that
could be won back by the UK.
6. The Automotive Council was announced on 12 November 2009 as
part of the previous government’s response to recommendations made
in the industry-led report from the New Automotive Innovation and
Growth Team (NAIGT). NAIGT was chaired by Richard Parry-Jones. Its
main aims are to enhance the attractiveness of the UK as a
location for global automotive investment, promote UK-based
manufacturers and technologies, strengthen the supply chain and
position the UK as a leading global player in developing,
manufacturing and using ultra-low carbon technologies.
7. The offer to JLR of a £26 million grant from government is
subject to approval from the European Commission.
8. BIS’ online newsroom contains the latest press notices,
speeches as well as video and images for download. See www.bis.gov.uk/newsroom
for more information.
Contacts:
BIS Press Office
NDS.BIS@coi.gsi.gov.uk
Rebecca Murrell
Phone: 020 7215 6403
Rebecca.Murrell@bis.gsi.gov.uk