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25 February 2014 | Will Green
With a rise in car production in the UK it is predicted the proportion of parts sourced from the domestic automotive supply chain will increase to more than 40 per cent.
The UK’s 2,000 supply chain companies have been “ravaged” over the past two decades, with the proportion of parts sourced from them dropping to 35 per cent, but KPMG said the sector was now experiencing unprecedented investment.
John Leech, UK head of automotive at KPMG, said: “A key question vexing the industry and government is whether this will percolate down into jobs growth in Britain’s 2,000 supply chain companies. In the 1990s and 2000s the UK automotive supply chain was ravaged and the proportion of parts sourced from UK suppliers dropped to as low as 35 percent.”
However, he said recent investments meant “the proportion of parts sourced from UK suppliers is likely to rise above 40 per cent by 2017”.
Leech said this would translate into “tens of thousands of jobs”, adding: “We are seeing a substantial upsurge of interest by potential investors in the UK automotive supply chain the like of which we haven’t seen for several decades.”
Total UK car production hit just over 1.5 million in 2013, but is expected to rise to more than 2 million in 2017, according to the Society of Motor Manufacturers and Traders (SMMT).
Mike Hawes, SMMT chief executive, said: “We expect domestic car output to accelerate throughout 2014 as new model introductions reach full volume. Looking further ahead, we anticipate further growth as investments by some of the world’s biggest automotive brands become reality, creating more jobs and huge opportunities for UK-based suppliers.”