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8 June 2016

UK auto industry supply chain seeing rising investment

Content team

The coming years look set to deliver increased investment in the UK automotive industry supply chain, research has indicated.

After surveying more than 100 of its supply chain member firms, the Society of Motor Manufacturers and Traders (SMMT) revealed plans for nearly £225 million of investment over the next three years.

One of the key factors in this trend is the ongoing drive to boost the British content of vehicles built in the UK.

More than nine out of ten respondents to the survey (94 per cent) had plans to invest in their businesses in the next three years, with over three-quarters (79 per cent) of this group set to spend on plant, machinery or tooling.

Nearly three in four auto supply chain companies (73 per cent) are planning investment in skills and apprentices, while two-thirds (66 per cent) will concentrate on product development.

The UK automotive industry's supply chain consists of over 2,000 firms, which contribute around £4.3 billion to the economy every year.

There has been something of a renaissance in the sector over recent years, according to the SMMT, with the proportion of locally sourced components in the average British-built car rising from 36 per cent in 2011 to 41 per cent today.

Mike Hawes, chief executive of the industry body, said: "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."

The research identified some possible barriers to growth for British-based auto suppliers, such as exchange rate inconsistencies, overseas competition and a shortage of skilled workers.

Content team, Bureau van Dijk

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