SOCIETY OF MOTOR MANUFACTURERS AND TRADERS LIMITED SMMT, the ‘S’ symbol and the ‘Driving the motor industry’ brandline are trademarks of SMMT Ltd

UK automotive supply chain – challenges & opportunitiesKonstanze Scharring, SMMTWestminster Energy, Environment & Transport Forum 01 November 2011

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UK automotive industrySector is an important contributor to private sector investment & export led growth

• UK automotive turnover - £49bn in 2010 – 6.7% of total UK.• Sector employees 150,000 directly, 720,000 in total. • 7 volume car producers.• 8 commercial vehicle producers.• 19 of world’s largest 20 component manufacturers in UK.• Produces 1.5mn vehicles and 2mn engines• Invested £1.5bn in R&D in 2010• 78% of vehicles produced are exported• Accounts for over 10% of total UK exports

– valued at more than £25bn• Automotive is largest exporter of goods

Matthias Holwegwith

Yung TranPhilip Davies

Stephan Schramm

THE UK SOURCING ROADMAPCREATING AND SUSTAINING SUPPLY CHAIN CAPABILITIES IN THE UK AUTOMOTIVE INDUSTRY

2010 2011 2012 2013 20152014

Alternative powertrain parts entering

full-scale production

Support LCV demand

UK Sourcing Roadmap

Interior & exterior

Body & powertrain

Electrics & electronics

Identify Top-10

suppliers

Survey point #1:A. OEMs’ UK sourcing: £7.4bnB. GVA in UK supply chain: £4.8bn

Survey point #2:A. Increase in OEMs’ UK sourcing?B. Increase in GVA in UK supply chain?

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Support R&D at UK suppliers

Target international suppliers

A. Shop-floor competitiveness

B. Total supply chain cost modelling

C. Finance to sustain and grow business

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* Interface area withTechnology Group

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• April 2011 event:• 200 People participated• • 30 Buyers from • 20 companies included • BMW, Ford, GM, • Honda, JLR, Nissan

• Around 90 Suppliers

• Over 200 1-2-1 • meetings

• Next: 3 regional events • 31 Oct Melton Mowbray • 8 Nov Chester • 15 Nov Bridgend

SMMT ‘Meet the Buyer’ events

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Government policies to support investment & growthKey industry asks for Autumn Statement

Industry seeks a supportive business environment that allows automotive sector to drive innovation, secure high quality employment and deliver sustainable economic growth

Need for unlocking private sector investment in R&D, capital equipment, plants and machinery, and skills– Reform R&D tax relief for large companies to make it internationally competitive – Reverse reduction in capital allowances to support cyclical, high investment

industries like automotive – End uncompetitive business rates and opaque valuation methodology for

automotive sites in the UK– Encourage flexible investment in skills across the workforce

Ensure quantitative easing and credit easing actually supports the automotive supply chain