UK: Tooling finance flexibility key to supplier needs: KPMG
Flexibility surrounding tooling finance will form a key component in addressing supplier needs during the next year, say consultants, KPMG.
Addressing an audience of suppliers and bankers at today's (21 November) inaugural 'Meet the Funder' day near the UK's second city of Birmingham, KPMG partner, Mark Orton, highlighted the importance of tooling finance.
"As long as I have been involved in the automotive business, tooling has been a debate," said Orton. "The OEMs want to control the IP so that if a business fails they own that IP.
"The issue for the component supplier is they have to buy that tooling, but as soon as they acquire it, they have to pay up front, but not actually have title to it. What is required is some flexibility and compromise, so if a business fails, the debt of a tool can transfer to the next supplier.
"I am confident we will reach a successful conclusion in the next 12 months and it is in everybody's interest that happens sooner rather than later."
Despite raising the tooling issue at today's SMMT event that brought together 70 suppliers to meet 25 financial institutions - the KPMG partner nonetheless painted a rosy picture of the UK automotive landscape - in stark contrast to the turmoil currently being experienced across the English Channel.
"Why is the UK so attractive?" said Orton. "No matter what we think about the woes of the UK, compared to the Eurozone, the UK is very stable. We have low tax rates [and] a government supportive of the UK manufacturing sector, perhaps a little later than we would have liked.
"We have a weakening of the Pound, a favourable labour pool, some of the lowest labour costs in the whole of Europe, productivity levels second only to Germany [and] labour laws conducive to inward investment."
Also in stark contrast to Europe, KPMG is forecasting the UK car market to grow to around 2.2m units by 2019 with an incremental increase in the British supply chain of some EUR3bn (US$3.8bn).
We live in strange times. As Fisker, a rival with supposedly superior range-extending technology falls apart, the value of Tesla rises yet again, this time by almost two percent on Wednesday to US$9.7...
Although the Chinese car market is expected to see growth of around 10% this year, prospects for premium brands have deteriorated as a result of the Chinese government's anti-corruption campaign, acco...
Honda will be returning to Formula One in 2015, confirming rumours which have been circulating since the Geneva show in March....
The production of cars in the UK rose 16.6% to 110,033 units in April, bucking the downward trend of recent months....
Magna International said its Cosma International operating unit was one of eight suppliers which received a BMW Supplier Innovation Award. It was recognised for a lightweight, high-voltage battery hou...
- ANALYSIS: Will the XE work for Jaguar?
- ANALYSIS: Autonomous cars and interior design
- Williams CEO eyes consultancy business expansion
- VEHICLE ANALYSIS: Celerio and Suzuki's future cars
- COMMENT: GM's new Camaro to join a surging segment
- INDIA: Tata learns from mistakes with GenX Nano
- Takata recall widens to 33.8m vehicles in US
- Ford UK stresses importance of low interest rates
- INDIA: Renault reveals US$5,000 Kwid global small
- VW autonomous braking slashes insurance claims