Tata Steel says there is a strong possibility of increasing UK component supply to 60% as the UK Automotive Council released a report identifying GBP2bn (US$3.2bn) of new parts manufacture opportunity.
The publication of “Growing the Automotive Supply Chain – Assessing the Upstream Sourcing Potential” – looks at the possibilities for increased UK component and raw material supply to Tier 1 companies – and comes as Britain is enjoying something of a boom period which the Society of Motor Manufacturers & Traders (SMTMT), estimates could see record production by 2017.
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“About one third of what Tier 1s buy is UK-sourced,” said Tata Steel manager research and development, Professor Jon King, addressing yesterday’s (4 November) Open Forum in the UK city of Birmingham.
“The majority of goods are imported from countries not regarded as low-cost, such as Germany, France and Japan. At every level there is willingness to purchase more from the UK. Many people in the UK supply chain feel confident – well so they should.
“The main reasons for not purchasing from the UK are lack of stable suppliers or lack of suppliers with technical capability. More than 58% of the value of components imported is accounted for by electronics, machined metal components, forgings, steel and plastic granulate resin.”
King added there was a “realistic long-term reshoring potential” to raise the proportion of Tier 1 UK-sourced goods to match the 60% typical of countries similar in size to Britain, echoing the GBP2bn cited in the Automotive Council’s report.
“High value import commodities should be investigated to determine the feasibility for increasing UK sourcing,” said King. “Specific support should be given to SME supply chain companies to their long-term competitiveness.
“[The] report clearly identifies the potential GBP2bn opportunity. A strong supply chain will encourage the OEMs and Tier 1s to continue R&D in the UK.”
