The British automotive parts sector has experienced strong growth over the last six years and now supplies 44% of the components used by UK carmakers, according to the findings of a new Automotive Council study.
Hillfoot are heavily involved in the automotive components sector in the UK, providing steel bar, engineering services and metallurgical advice to a number of first-tier suppliers and their sub-contract networks.
Our specialists had noted an upturn in demand for materials from the industry and were delighted to see that impression confirmed in the Growing the Automotive Supply Chain - Local Vehicle Content Analysis report.
The Automotive Council’s research showed that the proportion of British-made components used by UK car manufacturers has risen from 36% in 2011 to 41% in 2015 and up again to its current level of 44%.
With the trend being accompanied by increases in car production, the total value of parts sourced from UK first-tier suppliers grew by an estimated 60% between 2011 and 2017.
There are clear economic advantages to the country of more parts being sourced from UK-based suppliers, but the Automotive Council also identified a key benefit to the carmakers.
Using local suppliers allows the UK’s vehicle manufacturers to operate on a Just In Time delivery basis, reducing costs, improving the availability of materials and reliability of supply chains, and cutting the potential for production delays.
The increased reliance on parts from first-tier suppliers in the UK was achieved during a period of significant growth for the country’s automotive industry.
Society of Motor Manufacturers and Traders (SMMT) statistics showed that the number of cars made in the UK grew by 8.5% in 2016 to hit a 17-year high of 1.7 million, while UK engine manufacturing increased 7.5% to 2,545,608 units.
Of those engines, 1.12 million were produced for the home market - the largest volume since records began.
As a result of the increased demand, both at home and from export markets, and a sharp rise in new investment, UK automotive parts manufacturers have increased output by 41% since 2011 and the sector is now worth £12.7 billion a year.
Hillfoot have significant experience of using our close relationships with steel mills around the world and established logistics set-up to optimise supply chains for component manufacturers.
Often this takes the form of implementing dedicated or consignment stock solutions, which enable Just In Time delivery of the exact quantities and sizes of each engineering steel grade required.
This solution not only allows Just In Time delivery but also improves customer cash flow, which in turn can increase efficiencies in the supply chain. Material can be delivered in bar or billet form and can if required be packaged in ‘customer specific’ pallets to allow direct delivery onto the production line.
This gives the manufacturer the flexibility to respond quickly to the changing order volumes of car and commercial vehicle makers, while benefiting from stable prices and improving working capital management.
Our technical team have also been able to reduce costs for automotive parts manufacturers by redesigning production processes, advising on optimum grade selection and working with steel mills and forging partners to deliver materials in a form that minimises waste.
Contact Hillfoot via the website or on 0114 233 1133 for more information about our services for the automotive sector and to discuss how we could improve the efficiency of your company’s supply chain.