Automotive supply chain companies need to seize a “once in a generation” opportunity to exploit the renaissance of UK car manufacturing according to a leading industry figure.
And Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders (SMMT) has urged manufacturers to move fast to ensure they don’t miss out.
Mr Everitt was speaking ahead of a Meet The Buyer event organised by the SMMT aimed at bringing car manufacturers, tier one supply chain companies and smaller component makers together, held in Solihull on Tuesday.
Car manufacturers attending the event included Aston Martin, Bentley, BMW, Ford, General Motors, Jaguar Land Rover, Nissan and Tata Motors and more than 100 suppliers were in attendance to pitch to potential customers.
“We are very positive and this is a window of opportunity but it will not be open forever,” said Mr Everitt. “If we miss out that potential business will be gone for a generation. Then you don’t know whether you will ever get it back.
“This is a crucial time and it is about everybody playing their part in securing success.
“This investment has created a window of opportunity – probably a year or two at most for us to be able to seize it.
“New models will be produced over the course of the next 18 months to two years so sourcing decisions are being made now.”
The key driver has been the buoyant state of car manufacturing as highlighted by JLR’s recently announced record £1.5 billion profit. Added to that JLR has pledged huge investment in both R&D and new model development.
Mr Everitt added: “The background is relatively simple. We’ve had a wave of investment committed to the UK over the last 18 months – ranging from new facilities, model programmes, R&D and the supply chain.
“There’s General Motors and the new Astra being built at Ellesmere Port, JLR’s investment in a new engine facility, the success of the Range Rover Evoque and other products too.”
A number of factors are behind the potential boom, according to Mr Everitt, but all point to a desire by companies manufacturing in the UK to source parts closer to home.
“We are in a good place and all vehicle manufacturers have indicated they would like to be increasing their sourcing here in the UK,” he said.
“There are a variety of reasons, including the cost of transport. Some of the cost savings that were supposed to be achieved by outsourcing to supposedly low cost markets haven’t really materialised.
“Also there is an increasing emphasis placed on proximity to final assembly, particularly at the luxury end but increasingly at the volume end too. And there’s increasing demand for customisation and you can only do that if you have got key components located close to final assembly point.
“Finally the reduction of risk. Things like the Tsunami in Japan and the floods in Thailand are ‘black swan’ events that are only supposed to happen once in a generation.
"But we are finding these type of disruptive events seem to be happening relatively regularly.