LONDON — Cars assembled in the UK feature more domestically-made components compared to two-years ago, highlighting a move by manufacturers to protect themselves from Brexit related disruptions to their supply chain.
A report by Automotive Council UK found that 44% of all components used in UK vehicle assembly come from Britsh suppliers, compared with 41% in 2015.
This is up from 36% in 2011, with turnover in the UK auto parts industry increasing from £9 billion that year to more than £12 billion in this year.
“Operating on a ‘just in time’ delivery basis, sourcing from UK suppliers reduces time and cost of supply chains, reducing the risk of delays which can halt production,” the report said.
Greg Clark, the Secretary of State for the Department for Business, Energy and Industrial Strategy, said the report “shows that we are still making good progress in increasing the UK content of the vehicles we produce. It also highlights that there are many more opportunities for us to exploit.”
The UK’s exit from the European Union, along with its single market and customs union, has the potential to disrupt the international supply chains relied on by manufacturers of complex equipment such as vehicles. Companies both in Europe and in the UK are starting to protect themselves from fallout if the talks do not yield a special trade deal by the time Britain leaves the bloc in 2019.
Around 45% of European companies are seeking to replace UK suppliers with local businesses in preparation for higher international tariffs if Brexit negotiations fail.
Meanwhile, a third of UK businesses are actively looking to replace European suppliers, according to a survey of 2,111 supply chain managers carried out by the Chartered Institute of Procurement and Supply earlier this year.
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