Component suppliers risk losing business to Europe

6 June 2001
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07 June 2001 | Robin Parker

UK car makers have warned domestic component suppliers to cut costs or face losing business to mainland Europe.

Toyota, Nissan and Honda are looking to Europe-based companies to make major procurement savings in the next few years.

Toyota's UK division divides its purchasing equally between UK and mainland European companies. But price pressures and a strong pound have persuaded it to increase its European sourcing to 60 per cent by 2003, at the expense of UK firms, a spokesman told SM.

Its new factory in northern France, however, will still use UK suppliers. "It is a relatively small shift that reflects on the global automotive supply industry."

Nissan is in the second year of a three-year global plan that requires it to cut costs at its Sunderland plant by 30 per cent. A spokeswoman said the company hopes to increase the proportion of components purchased in European currencies from 30 per cent to up to 65 per cent. This does not exclude quality British suppliers that deal in euros, she added.

In July, Honda opens a second UK production line in Swindon, but purchasing manager Tony Belton said the issue was complex. "We've always had a European supply base, but borders are transparent," he said. "Mainland European suppliers have UK bases too and we will source wherever commercially viable."

SMjun2001

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