"Critical Time" For Automotive Components Industry
The UK's automotive components industry is at a critical "tipping point" and could vanish by the middle of the decade without urgent action, members of the Welsh Automotive Forum were warned. It wouldn't run down gradually but, like a ship sinking, would suddenly vanish, said Prof. Garel Rhys, chairman of WAF. "In 2008 the automotive manufacturing sector employed more than 163,000 people but two years later it was down to 116,000 – that's a 28 per cent cut and an absolute blood letting," he said speaking at WAF's winter networking dinner.
“I am concerned it is getting to the point of no return and once the supplier base goes it will not be long before we see the manufacturing base going as well,” said Prof. Rhys. “It is a fallacy that the UK cannot compete with other parts of the world. The fact is our unit cost per head is among the best in Europe, our productivity is very high, but the industry needs support from the vehicle makers and the government if it is to survive and prosper. We can put up a very strong case to build any new vehicles in Britain.
“Earlier, guest speaker Bill Parfitt, chairman and CEO of GM UK, had warned that the UK’s automotive supply chain “won’t be here by 2016 if we carry on as we are” but there were reasons for optimism. Mr Parfitt, who also heads the Automotive Council’s supply chain council, said that the council was close to publishing a ‘road map’ showing what manufacturers want and what component suppliers can deliver.
“We know there are big gaps in that road map,” he said, adding that he had identified £1.5 billion worth of business that could come back into the UK through GM rising to £6 billion over the next few years. GM doesn’t buy enough in the UK but we have to improve the supply base before we do; every pound I spend here makes a big difference to my exposure to foreign exchange fluctuations. We need to dispel the myth that the UK is expensive and start to shift production back from eastern Europe to the UK – the mood is ready to reverse that trend.”
He urged suppliers to collaborate on research, development and products and to work more closely with vehicle makers on lead times for new models. “There is not a lot of research and development here and many UK suppliers don’t have the expertise to talk to our German R&D teams, for example, so we’re going to address that.”