As many as 28,000 new jobs could be created in the UK automotive supply chain by 2020, according to a new forecast report from industry trade body The Society of Motor Manufacturers and Traders (SMMT).
The report, The future of UK automotive manufacturing in 2025 and beyond,1 identifies growth in vehicle manufacturing and a move to connected and autonomous technology as presenting significant opportunities for British component suppliers in the coming years. It estimates that British car production is set to reach a record two million vehicles annually by 2020 – a 33% increase on the current 1.5 million.
This boost in output will require an additional 9,500 employees at vehicle manufacturers in the UK – and almost three times the number of workers at the component companies that supply them. For every job created in a vehicle plant, it is estimated that on average between three and five are created in the wider economy.
Huge investments have recently been committed by vehicle manufacturers and component suppliers alike – with more than £2 billion announced in 2015 alone. New car production is already at a high level having posted impressive growth in recent years, up more than 50% since 2009. Automotive products now account for a greater share of British exports than ever before at 11.8%, while the average value of cars exported from the UK has doubled in the past decade.
Having suffered during the recession, the UK automotive supply chain is now showing strong signs of recovery. Automotive Council figures released in September revealed that 41% of the average UK-built vehicle is now locally-sourced – up from 36% in 2011.2 With up to 80% of the components that go into a car capable of being produced here, the potential for supply chain growth has been pegged at some £4 billion.
Integral to the sector’s recent growth have been government-industry partnerships: the Automotive Council-initiated Advanced Manufacturing Supply Chain Initiative, Regional Growth Fund and National Tooling Fund have helped to finance the expansion of many companies, enabling them to meet increasing demand from British car makers for locally-sourced components.
Mike Hawes, SMMT Chief Executive, said, “The recovery of the UK automotive supply chain is gathering pace, and this new report shows that the opportunities for further growth and development will be plentiful in the coming years, particularly as the drive towards fully connected and autonomous vehicle technologies accelerates. A strong domestic supply chain is crucial to the success of the industry as a whole, and crucial to attracting new inward investment, so it is critical that the support from government-industry partnerships we have enjoyed in recent years continues to ensure the sector is able to realise its full potential.”
The evolution of the supply chain, as well as the opportunities presented by connected and autonomous vehicles, was explored today at SMMT’s Open Forum event at Cranmore Park in Solihull. A day of debate and networking for around 400 UK automotive supply chain delegates, the event featured talks from Mike Bell, Global Connected Car Director, Jaguar Land Rover; Iain Forbes, Head of government’s newly established Centre for Connected and Autonomous Vehicles; and Judith Richardson, Vice President of Purchasing, Nissan Europe.
The next SMMT Open Forum, meanwhile, is set to take place at the inaugural Automechanika Birmingham in June 2016. This will be the UK’s first trade show dedicated to automotive supply chain and aftermarket companies.