Auto firms increase component spend by £3 billion

13 August 2012

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13 August 2012 | Kamalpreet Badasha

There is an additional £3 billion of contracts for components available in the UK automotive sector this year.

A report by the Automotive Council, Growing the Automotive Supply Chain: The Road Forward – 2012 Update which looked at a list of 27 components, found the purchasing spend of UK vehicle manufacturers is estimated to be £23.6 billion, an increase of £3 billion on 2011. It is expected £8.4 billion will be spent with UK suppliers.

The largest spend will be on engine castings, worth £370 million, and with the UK producing 2.5 million engines a year suppliers are well positioned to meet demand. The second highest spend is £220 million for steering systems. The report stated around 80 per cent of all types of component required for vehicle assembly operations can be produced by British vendors.

The Automotive Council is raising awareness among suppliers to pursue this new business. One method is the Supply Chain Work Group whose activities include enhancing dialogue between manufacturers and suppliers on business opportunities. The council is also working with government’s overseas trade and investment network to alert potential global suppliers of the opportunities to do business in the UK.

“With government and industry working collaboratively together through the Automotive Council, I am confident that we will seize every opportunity to bring back some of the supply chain which has gone offshore,” said business secretary Vince Cable.

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