Automotive supply chain in the UK

As the demand for UK-made vehicles continues to boom, UK automotive production will exceed 2 million cars by 2020. Which means a huge opportunity for businesses involved in all parts of the supply chain.

The demand for UK components

The UK’s automotive supply chain is currently enjoying a period of unprecedented growth. In 2015, our automotive manufacturers spent 31 billion GBP on components and that sum is growing by 3 billion GBP per year.

The local content of UK-made cars rose from 36% in 2011 to 44% in 2017, and is continuing to increase. UK car manufacturers have identified an additional 4 billion GBP of annual component purchasing they would like to buy from UK suppliers, but are not always able to do so as UK component plants are already running close to or at full capacity. This provides a huge opportunity for overseas investors setting up in the UK.

Major supply chain opportunities

Component Value (GBP million) Component Value (GBP million)
Engine castings 550 12V Lead/Acid Battery 90
Steering systems 330 Cast aluminium sub-frames 90
Trim 255 Brakes 80
Engine forgings 255 Drive shafts 80
Pressing and hot stampings 240 Fuel tanks 75
Seat components 225 Engine accessories 75
Alloy wheels 210 HVAC assembles 75
Lighting 210 Misc. (mirrors, pedals, etc.) 60
Electronics 170 Shock absorbers 60
Plastic mouldings 150 Oil pans 30
Entertainment & navigation 135 Premium finish 50
Bearings 120 Weather strips 50
Instrument Clusters 120 Switchgear 30
Glass 110 Other 520
Hinges 105

A committed community and a connected network

Car manufacturers are looking to streamline their supply chain by reducing transportation and logistics costs. Choosing local suppliers reduces costs and creates major supply chain opportunities in the UK’s already established regional hubs.

The heart of the UK automotive industry is located in the Midlands with Birmingham at its centre. It’s the home of Jaguar Land Rover and has the largest concentration of automotive component suppliers in the UK.

There are also major automotive clusters in the North East, including the Nissan factory in Sunderland (the largest single car factory in the UK making 500,000 cars a year) and the North West, home to factories of General Motors (Vauxhall), Jaguar Land Rover and Bentley.

There’s also ‘Motorsport Valley®', a globally renowned cluster of automotive expertise. Located in the English Midlands and Oxfordshire, it’s the home of global motorsport. With 4,500 motorsport companies, many of which now supply global car manufacturers and component suppliers with advanced engineering solutions, Motorsport Valley® has a unique ability to help any automotive company gain a competitive edge.

The low-emission vehicles market and UK government support

The UK is the largest ultra low emission vehicle (ULEV) market in the EU with over 110,000 ULEVs on the road.

Grants for consumers to purchase ULEVs and improved charging infrastructure have caused this market growth. The UK government and automotive industry are funding a 1 billion GBP Advanced Propulsion Centre for later stage R&D projects around low carbon powertrain and production.

The UK government has supported the early market for ULEVs with investment of 1 billion GBP.

The UK already has the largest network of rapid charging points for electric vehicles in Europe, as part of a network of over 10,000 publicly accessible chargepoints. And in 2016, 1 in 5 electric cars sold in Europe was made in the UK.

The UK government is supporting the automotive industry to bring improve the effectiveness of electric vehicles, reduce their cost and to increase their range. It will invest 246 million GBP over 4 years in the design, development and manufacture of batteries for vehicle electrification.

Support and incentives

All these areas have dedicated bodies which assist and promote their local automotive industry.

In the Midlands, Drive West Midland is a pioneering programme that supports the development of small or medium sized enterprises and coordinates local support services for the automotive sector.

Further north, there is the Northern Automotive Alliance and the North East Automotive Alliance Both organisations provide support to companies setting up in the region, as well as to the industry at large.

The government also has up to 50 billion GBP available to support finance and insurance for supplies from within the UK to buyers outside the UK. This support takes the form of guarantees, insurance and loans issued by its export credit agency, UK Export Finance.

Our talent and skills

The UK is the global home of motorsport. Six of the 10 Formula One motor racing teams, including McLaren, Williams and Mercedes-Benz, have made the UK their headquarters.

We have world-class universities, with 4 of the world’s top 10 universities, and 9 of the top 10 EU universities according to the international QS ranking.

We have leading engineering companies like Ricardo and world-class automotive research facilities thanks to the recently-established Catapult network.

We’re leading the move to low carbon propulsion. Europe’s only large scale battery facility for electric cars is here. Currently we account for over 20% of European electric vehicle production.

Last updated 02 February 2018

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