Francis Evans

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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 CHAINA GOVERNMENT PERSPECTIVE
Presentation for University of Birmingham
Automotive Engineering course 21st October 2004
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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 worlds top 20 Tier 1 companies
• operate in the UK

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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

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KEY STATISTICS
See http//www.autoindustry.co.uk/statistics/key
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KEY STATISTICS
See http//www.autoindustry.co.uk/statistics/key
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KEY STATISTICS
See http//www.autoindustry.co.uk/statistics/key
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INWARD INVESTMENT

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

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INWARD INVESTMENT
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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

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THE UKs 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
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DTI STRATEGY
Globalisation
Globalisation
Technology and innovation
World Class
Company improvement
Education and skills
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AIGT PRIORITIESAutomotive Innovation Growth
Team

• Automotive Academy
• Supply Chain Groups
• Technology Centres of Excellence
• Low-carbon technologies
• Transport telematics
• Foresight vehicle RD collaboration
• Mobility projects in 3 UK cities
• The AIGT reports can be downloaded
• from www.autoindustry.co.uk

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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

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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

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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.
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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
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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 ones own time
• Business culture
• Continuous professional development

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This presentation will be on
www.autoindustry.co.uk