Almost half (49%) of UK automotive manufacturers now view overseas competition as one of the sector’s biggest challenges, according to new research conducted by Lloyds Bank.
The issue would appear to have overtaken the previous biggest threat cited by most UK firms, the health of the global economy, in large due to uncertainty about the long-term impact of Britain leaving the European Union.
Little over a third (35%) of businesses considered the global economy the biggest threat, compared to 43% in 2015.
Though uncertainty is prevalent, on a more positive note, a third (34%) of automotive businesses believe that having more competitive exports due to the depreciation of sterling is one of the sector’s largest opportunities.
In Lloyds Bank’s third annual survey of the UK automotive sector, almost two-thirds (60%) of manufacturers cited a lack of knowledge as the biggest barrier holding them back from achieving their export ambitions; whereas 40% named monetary considerations as a hurdle to investing in international trade.
However, at 77%, most UK manufacturers are still investing in or planning to engage with new international customers. The Manufacturer’s own Annual Manufacturing Report 2017 found that 63% of those firms surveyed considered UK exports ‘vital’ to economic growth and the future of their businesses.
The Lloyds Bank study revealed that 64% of respondents believe that “European political uncertainty” would have an adverse effect on their businesses. This could be an indicator as to why new investments are being increasingly targeted towards North and South America, and the Middle East. Conversely, the number of firms targeting the Far East and Africa fell by 1% and 10% respectively.
David Atkinson, head of manufacturing at Lloyds Banking Commercial Banking and report co-author, commented: “Changes seen over the past year are bringing new challenges, but also different opportunities for the automotive sector, and it’s good to see firms recognising both.”
UK automotive at a glance:
- 169,000+ direct jobs // 78,000 employed across UK supply chain
- 25,000 new jobs to be created to cover the production of connected and autonomous vehicles
- 2,000+ automotive suppliers in the UK – including 18 of world’s top 20
- £71.6bn annual turnover
- 80% of a vehicle can be manufactured in the UK
- Annually adds £12.4+bn to the UK economy
- Annually producing £34.3bn of exports – accounting for 12% of the UK’s total export goods
(Information courtesy of www.smmt.co.uk)
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