Wednesday 30th Sep 2020 - Logistics & Supply Chain

Opportunities increase in automotive supply chain

The UK has become a destination of choice for global vehicle manufacturers – creating major supply chain opportunities, according to a report compiled by KPMG for the Society of Motor Manufacturers and Traders.

Automotive manufacturing is forecast to grow by nine per cent a year to 2.2 million vehicles in 2016, the report said, suggesting that there were £3 billion of supply opportunities for UK-based businesses.

“. It is clear that domestic suppliers have the potential to benefit significantly from increasing output volumes, but they need the right mix of government support and private investment,” said SMMT chief Paul Everitt.

The report suggests that the UK’s key strengths lie in the varied mix of manufacturers that have all built reputations for quality and engineering excellence. However, there are factors that pose a risk to ongoing success. To develop and keep pace with change, urgent action is required to address an impending skills shortage in key industry areas.

As technology advances, low carbon development grows in importance and vehicles integrate communication, safety and entertainment software, skilled engineers become increasingly sought after.

The other key area of concern identified in the report centres on the need to reinvigorate the lower tiers of the domestic supply chain. While 80 per cent of parts required for automotive manufacture can be sourced in the UK, the capacity and ability of these suppliers to meet demand is not at the required levels.

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