UK automotive local content hits 44%

Will Green is news editor of Supply Management
20 June 2017

The proportion of locally-sourced parts in the UK automotive sector has reached 44% in 2017.

Analysis by the Automotive Council found the proportion had increased from 36% in 2011 and 41% in 2015 as a result of initiatives to increase local sourcing.

Combined with an increase in UK car production, the report said there had been a 60% growth in the value of parts sourced from first-tier suppliers between 2011 and 2017.

“A strong, innovative and responsive supply chain is central to maintaining the competitiveness of the UK automotive sector,” said the report.

“Raising the local content from UK suppliers is a key performance measure for the UK automotive industry.”

The report said no benchmarks were available but anecdotal reports suggested countries such as Germany and France achieved 60% local content. Because of the global nature of supply chains, the report said: “This is likely to be the highest level of local content that is realistically achievable.”

The report added: “From a UK perspective, given the ownership structure of the tier one supply base, 50% local content by value is regarded as a more plausible target for the overall UK car industry.”

The report said the output of the UK automotive parts sector had increased, with turnover rising from £9bn in 2011 to £12.7bn currently.

“Following a period of supply chain hollowing out and the realisation that action was needed to reverse this trend, concerted and joint action by industry and HM government has resulted in significant investment by global suppliers into their UK operations,” said the report.

“Plants have been expanded and new ones built as global corporations have recognised the advantage of investing in the UK and the growth in UK car output has made local supply more viable through increased volumes.”

The report said its data could not be used to “inform the country of origin of a particular product, for the purposes of establishing likely tariffs under WTO rules or any other trade agreement that UK may make with any other nation following departure from European Union”.

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