Improving British automotive production and sales numbers need to go hand in hand with greater emphasis on local content sourcing, says Tata Steel manager research and development, Professor Jon King.
The UK auto industry has recovered strongly from its recent severe recession and Professor King made his comments on domestic component availability at the same time as the British Automotive Council issued a report identifying GBP2bn (US$3.2bn) of new supplier opportunity.
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“We have a net trade deficit,” said King, addressing yesterday’s [4 November] Society of Motor Manufacturers & Traders (SMMT) Open Forum in the UK Midlands city of Birmingham. “The more successful the recovery in terms of sales and production the worse the trade balance gets for parts for vehicles – that is the bit we have got to try and do something about.
“Seventy-five percent of these imports come from Europe – that is not a particularly low-cost area. There is no fundamental reason why we can’t make more components in the UK.
“The challenge we have [is] Germany made 5.4m cars – we made 1.5m. Domestic sourcing to German SMEs is 60% – we have 30%. German SMEs are more stable and more capable.
“We should increase UK production, that is happening. We will get beyond 2m – hopefully sometime in 2017 – that is 33% growth. We need to nurture and grow UK SMEs.”
The Automotive Council report: “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.
The GBP2bn it identifies is in addition to the GBP3bn previously cited for further parts sourcing direct to vehicle manufacturers.
