Joe Greenwell, CEO of the Automotive Investment Organisation and former Chairman of Ford of Britain speaks about the opportunities for manufacturers and investors in the UK automotive supply chain ahead of this week’s ‘Meet the Buyer’ event in London.
The UK’s automotive industry is thriving. The range and depth of expertise encompasses everything from mass market hatchbacks, through to super premium saloons, sports cars, SUVs and ground-breaking engine design. The UK’s world-leading motor sports industry has also helped create an environment which is at the forefront of innovation in engine technologies and ultra-low emission vehicles. Vehicle sales are at record levels and last year we produced more than 1.6 million vehicles – the highest output since 2004. This growth is even more impressive when compared to our European competitors, many of which saw car production levels fall in 2013. Investment in the UK automotive sector has grown in recent years. Just last week JLR announced a £200 million investment into their Halewood plant, creating 250 new jobs on top of the 4,500 the plant already employs. There is no questioning the UK’s ability to manufacture cars that have global appeal – 80 per cent of our total output was exported last year – the challenge is to grow the UK-based supply chain. Back in 2012 a report by the Automotive Council highlighted the huge opportunities open to manufacturers throughout the supply chain. It concluded that 80 per cent of components were capable of being manufactured domestically, representing an additional £3 billion of new business for both British suppliers and overseas companies looking to set up manufacturing in the UK. Currently only 30 per cent of components in a UK manufactured vehicle are manufactured domestically despite the UK having both the skills base and the research and development expertise to support an expansion in automotive component manufacturing. For instance, there is scope in the UK to manufacture the alloy wheels, batteries, glass and other components that are currently imported by the seven volume car manufacturers based here. To help address this imbalance the Government, in conjunction with the automotive industry, via the Automotive Council, set up the Automotive Investment Organisation (AIO) in June 2013 to attract inward investment to the UK. Since then the AIO team has worked hard to realise the potential of the UK’s automotive industry and I am pleased to report good progress in our first year of operation. The AIO has helped to attract £457 million of investment into the UK, securing or creating more than 5,600 jobs in the supply chain against a target of 4,000. The AIO has also helped to support more than 80 investment projects, including BorgWarner’s Turbocharger Centre of Excellence and its joint R&D collaboration programme with the University of Huddersfield. As a direct result of this, BorgWarner was able to secure a supply contract with JLR – both initiatives have resulted in over 200 new jobs and represent a combined investment of £26 million. This week the AIO and UKTI are hosting a joint ‘Meet the Buyer’ event with The Society of Motor Manufacturers and Traders. Taking place on 25 June in London’s Excel centre, it is designed to match buyers to suitable suppliers based in the UK and overseas. With more than 400 participants expected to attend, the AIO will be aiming to forge new partnerships which will ultimately create further jobs and boost the UK’s economy.