Cars built in Britain are now made from more parts sourced from Britain than they have been in years, the Automotive Council has announced. Today, 44 percent of parts for British cars are sourced from the UK: back in 2011, that figure was just 36 percent.
The improvement is part of a concerted ‘re-shoring’ drive to help maximise the value of the UK automotive industry to British companies. This helps lessen the effect of currency variations when building cars in Britain and improves the efficiency of production due to greater ‘just in time’ supply.
It could also help the British car industry cope with any Brexit-related trade implications.
The Automotive Council considers the reshoring drive an ongoing success story. Not only has UK car production increased by 72 percent since the Council was formed in 2009, the turnover of UK car parts makers has gone up by £3.7 billion in six years.
Secretary of State for Business, Energy and Industrial Strategy Greg Clark said the progress was encouraging but “there are many more opportunities for us to exploit”. He signalled government support would be forthcoming in “maintaining the international competitiveness of the UK automotive sector”.
Re-shoring takes considerable time, said SMMT chief executive Mike Hawes, adding that the domestic supply chain is the backbone of the UK automotive industry and “its health is crucial to the success of the whole sector”. The fact British cars are becoming more British is thus good news for UK automotive – but the long-term reshoring project still continues.
Not only is a strong supply of local content a prerequisite of car manufacturers when making decisions where to build cars, it can also help secure beneficial trading terms in any future free trade deals: these stipulate local content must meet minimum rules of origin thresholds for reduced tariffs to apply.
The UK car industry, with one eye on Brexit, will be redoubling its efforts to ensure Britain complies with these… perhaps even achieving the landmark 50 percent of local content in British cars along the way?
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