A new survey of more than 100 SMMT supply chain member companies, 94% said they plan to invest in their businesses over the next three years – at a total of £224,485,000.
Of those, four in five (79%) intend to invest in plant, machinery or tooling; three quarters (73%) in skills and apprentices; and two thirds (66%) in new product development.
Around 78,000 people are currently employed in the UK automotive supply sector, and seven in 10 companies (68%) said they plan to expand their workforce over the next three years. Potential investment does depend, however, on continued political and economic stability and the long term growth of the UK automotive sector.
The SMMT said: “The British supply chain is a critical element of the wider UK automotive industry, and consists of more than 2,000 companies contributing an annual £4.3 billion in value added (or tax receipts) direct to the UK economy.
“The sector suffered significant setbacks in past decades but is now undergoing a renaissance: 41% of the components in the average British-built car are now sourced locally, up from 36% in 2011.1 Efforts to maintain this growth are continuing, supported by both government and industry, and new business opportunities in the UK automotive supply chain are worth up to £6 billion.”
While the findings paint a positive picture of the health and confidence of British-based suppliers, respondents cited various challenges to success. The skills shortage is a key issue of concern, with two in five (41%) companies saying the availability of skilled workers, apprentices and graduates could impede their company’s growth in the next three years.
Mike Hawes, SMMT chief executive, added: “Britain’s car industry is booming, exporting more than ever, and it’s encouraging to see this opening up huge opportunities for the UK supply sector. A strong domestic supply chain is critical to a successful automotive sector and we are confident that, with the right political and economic conditions, significant supply chain investment can be secured, delivering more jobs and growth.
“Many of the UK’s competitors have far larger and stronger supply sectors, however, so continued government collaboration through organisations such as the Automotive Council will be critical as we strive to re-shore more supply chain work.”
