The Society of Motor Manufacturers and Traders (SMMT) has welcomed the launch of a new sourcing roadmap which identifies significant opportunities for increasing the strength of the UK based automotive supply chain.
Launched today by the Department for Business, Innovation and Skills (BIS), the UK Sourcing Roadmap – developed in partnership with the University of Cambridge and supported by SMMT – “is an important output from the UK Automotive Council and serves as the basis for prioritising actions to support the strengthening of supply chain capabilities in the UK,” the automakers’ lobby group said.
The findings from the full report reveal that approximately 80% of all components required for vehicle assembly operations in the UK could be procured from locally-based suppliers, leading to lower logistics costs, better support from suppliers, responsive configuration of parts, as well as the flexibility to adjust to volume and product mix fluctuations, SMMT claimed.
The roadmap identifies several key opportunities for retaining and building supply chain capabilities through visualising the key short-term and medium-term opportunities, as well as the areas where critical support is required for the UK automotive supply chain.
“This UK Sourcing Roadmap is a key step towards strengthening the UK supply chain and increasing the competitiveness of the UK, highlighting genuine potential for UK vehicle manufacturers to source more parts and components from home grown suppliers,” said SMMT chief executive, Paul Everitt.
“The transition to a low carbon future presents significant opportunities for the UK automotive sector and the roadmap will be a key tool in helping to identify where demand lies for local suppliers developing these new technologies.”
- On average, 74% of UK-based suppliers manufacture in the UK.
- At present, about 80% of all component types required for vehicle assembly operations can be procured from UK suppliers.
- 42% of UK suppliers classify themselves as first tier suppliers, 19% classify as second-tier suppliers while 34% categorise themselves as both first- and second-tier suppliers.
- The supply chain represents about 40% of the retail price of a passenger car.
- The combined UK purchasing spend of UK-based automotive, commercial vehicle and yellow goods manufacturers is GBP7.4bn per annum. The amount purchased in the UK equates to approximately 36% of their global purchasing spend.
- The UK automotive supply chain typically generates GBP4.5bn – GBP5bn of added value annually.
- The UK supplier spends on average £36mn, of which 46% is spent in the UK.
- Around 2,350 UK companies regard themselves as ‘automotive’ suppliers, employing around 82,000 people (data as of the end of 2009).
- It is estimated that every job in the vehicle assembly supports 7.5 elsewhere in the economy.