Further collaboration is needed between OEMs and component manufacturers in order to realise economies of scale in the automotive industry, says motors and fans supplier, Ebm-papst.
Addressing delegates at last week’s Automotive Supply Chain Magazine Congress at Silverstone, Ebm-papst UK managing director, Gareth Jones, noted there was more than GBP3bn (US£4.6bn) of supply business to be won but greater cooperation was required.
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“The automotive industry from an OEM industry, has the best collaboration I have seen if you look at compliance and type approval,” he said at the British Formula 1 circuit.
“There is a single voice that [goes] out from car manufacturers – every single car manufacturer is represented on the Automotive Council to make sure there is a single voice going to the European Commission.
[However] “There is a need for greater compliance further down the supply chain. The Automotive Council and the government have identified there are GBP3bn [of] components currently sourced out of the UK that they want to source in the UK.”The Ebm-papst UK managing director noted the supply chain might receive an order from Jaguar Land Rover for example for a volume of 50,000, but ideally needed 500,000 units to achieve the right economy of scale.
“There needs to be some further collaboration,” said Jones. “This is the message – there is not enough meat on the bone.
“If I am going to get something in the UK, I need it running at full capacity and the only way that is going to happen is if we get something from all the car manufacturers.”
Last year, KPMG compiled a report highlighted by the UK Society of Motor Manufacturers and Traders (SMMT) outlining the GBP3bn of supply opportunities.
Former SMMT chief executive, Paul Everitt, noted if anything, the GBP3bn was “probably an underestimate” as it was based on what vehicle manufacturers say they want to currently process.
“It does not include future model programmes or future growth in production or indeed anything that might be associated with aftermarket,” said Everitt. “It is a pretty solid number.”
The former SMMT head – a new chief executive is in the process of being appointed – noted there was around an “18 month window of opportunity” for UK suppliers to capitalise on the relatively benign automotive environment in Britain and as manufacturers look to make “strategic decisions” to source more locally.
