David Atkinson, Head of SME manufacturing at Lloyds Bank Commercial Banking discusses the UK’s automotive sector’s success and its future challenges.
It’s no secret that UK manufacturing has had to transform over the past decade, rise to the challenge of intense international competition and embrace technology. Nowhere has the industry’s success in charting this new course been more apparent than in the automotive sector.
Britain remains one of the leading players in automotive manufacturing. Our nation boasts a complex supply chain of high value engineering businesses which are increasingly attracting international attention. Now, according to Lloyds Bank’s latest report into the sector which surveyed more than 100 automotive manufacturers across England and Wales, ‘Fuelling Growth’, automotive manufacturing is set to lead from the front in creating jobs in the economy.
The report estimates that close to 50,000 jobs will be created by 2017 as the industry capitalises on the country’s automotive expertise and infrastructure, which also encourages manufacturing to be brought back to the UK.
Encouragingly, over 70% of the sector in England and Wales plans to move part of their production capacity onshore in the next two years, while over three quarters of respondents expect to grow up to 25% over the same time frame.
It is also clear from our research that automotive manufacturers are looking to the future with confidence; many having earmarked funds to reinvest into their businesses.
Replenishing R&D budgets to maintain Britain’s competitive edge in the global market, particularly in the development of electric and low emission technology, will be at the top of their agenda, while onshoring is a trend that clearly has further to go. Meanwhile, entering new markets was a priority for more than two thirds of the sector, further evidence of forward-looking management teams.
There is no denying that the sector faces some challenges. Most respondents feel the global economy is the greatest concern for the automotive sector. However, the findings of our research are testimony to the hard work of the industry, which has emerged from tough economic times in remarkably good condition, putting many businesses in a strong position to overcome hurdles in the future.
With the support of our sector specialists, we can provide the banking facilities that will help manufacturers across the supply chain, to navigate the challenges and opportunities that lie ahead.