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Francis Evans DTI Automotive Unit “Helping the UK-based vehicle and components industry compete and win in world markets” THE UK AUTOMOTIVE SUPPLY CHAIN: A GOVERNMENT PERSPECTIVE Presentation for University of Birmingham Automotive Engineering course 21 st October 2004

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slide1

Francis Evans

DTI Automotive Unit

“Helping the UK-based vehicle and components industry compete and win in world markets”

THE UK AUTOMOTIVE SUPPLY CHAIN:A GOVERNMENT PERSPECTIVE

Presentation for University of Birmingham Automotive Engineering course

21st October 2004

slide2

A GLOBAL INDUSTRY IN THE UK

  • 8 global vehicle manufacturers:
  • Honda Renault/Nissan
  • BMW VW Group
  • Toyota Ford PAG
  • GM Peugeot
  • One UK-owned volume manufacturer
  • 40+ low-volume manufacturers
  • Motorsport - the world leader
  • 17 of the world’s top 20 Tier 1 companies
  • operate in the UK
slide3

THE UK AUTOMOTIVE SECTOR

  • Turnover is 5.5% of GDP (£40bn)
  • Passenger car production 1.6 million in 2003 (growth at Honda, Toyota, BMW but MGR down)
  • 11% of UK exports (£19bn) - greater than any other manufacturing sector
  • 700,000 jobs in the UK industry of which 150,000 are in the components sector
  • 7,000 components firms of which over 90% are SMEs – many do not identify with automotive
  • Tax yield from the sector (VAT, VED and fuel duties) is 11% of total Government revenue
slide4

KEY STATISTICS

See http://www.autoindustry.co.uk/statistics/key

slide5

KEY STATISTICS

See http://www.autoindustry.co.uk/statistics/key

slide6

KEY STATISTICS

See http://www.autoindustry.co.uk/statistics/key

slide7

INWARD INVESTMENT

  • Within Europe, UK attracts:
  • 45% of US investment
  • 43% of Japanese investment
  • 15% of German investment
  • 50% of Korean investment
slide9

RECENT INVESTMENTS

  • Toyota £50m at Burnaston, plus 60k units
  • Nissan to produce new ‘Tone’ at Sunderland
  • Honda diesel engine at Swindon
  • BMW £40m at Swindon Pressings and . . .
  • £400m at Hams Hall for new engine family
  • Ford/Getrag JV £200m for new 6-speed
  • gearbox at Halewood
slide10

THE UK’s POSITION

  • Threats
    • 6m units overcapacity in Europe
    • 20m units overcapacity globally
    • (= one plant per VM based in Europe!)
    • Outsourcing of components
    • In summary: globalisation
    • Opportunities
    • Follow sourcing
    • Move up value chain
    • Indigenous growth through innovation
    • Attract investors
    • In summary: globalisation
dti strategy
DTI STRATEGY

Globalisation

Globalisation

Technology

and innovation

World

Class

Company

improvement

Education

and skills

aigt priorities automotive innovation growth team
AIGT* PRIORITIES*Automotive Innovation & Growth Team
  • Automotive Academy
  • Supply Chain Groups
  • Technology Centres of Excellence
    • Low-carbon technologies
    • Transport telematics
  • Foresight vehicle – R&D collaboration
  • Mobility projects – in 3 UK cities
  • The AIGT reports can be downloaded
  • from www.autoindustry.co.uk
supplier strategies
SUPPLIER STRATEGIES

there is no ‘correct’ strategy

  • high-volume, high added-value per person
  • rapid-response prototypes or one-offs
  • offer own brand value to customers
  • product innovation
  • process innovation
  • aftermarket supply: low volume/high variety
  • niche products/services
  • change the customer base
supplier examples
SUPPLIER EXAMPLES

Wagon – specialist in lightweight materials

GKN – global expertise in drivetrain

Bosch, tyre makers – own IPR

Momo, Recaro – recognised brands

Stadco – design product and process

Unipart – excellence in distribution

Castings plc – high-investment & quality

Prodrive – leveraging motorsport advantage

summary what it means for supplier companies
SUMMARY(what it means for supplier companies)

Global sourcing means commodity products can and will be sourced anywhere – this is an opportunity for suppliers too. But VMs do value access to new developments and added-value services such as late configuration and supply in line sequence (SILS). Suppliers need to choose their customer with care.

summary what it means for engineers
SUMMARY(what it means for engineers)

OEMs want Quality, Cost, Delivery . . . but also development capability, flexibility of response, integration with other suppliers, technology that enhances their brand. They value people with whom it is easy to work. Key qualities: communications, project management, team working, innovation

customer expectations for the supply of engineering graduates
CUSTOMER EXPECTATIONS FOR THE SUPPLY OF ENGINEERING GRADUATES
  • Up-to-date technical knowledge
  • Practical application of theory
  • Problem-solving approach
  • Team working ability
  • Written and oral communication
  • Project management
  • Managing one’s own time
  • Business culture
  • Continuous professional development
this presentation will be on
This presentation will be on …

www.autoindustry.co.uk