Before he stood down as GM Europe boss, Nick Reilly told the BBC that the big problem for car manufacturing in the UK was the lack of a local supply chain. Importing the majority of components for assembly in the UK is not the ideal route to being competitive in a cut throat market.
The UK supply chain has shrunk dramatically over the years and some claim that the number of UK supplier jobs have collapsed by a further 25 percent since the global recession. At first glance, the situation looks dire - after all, if the UK supplier base gets any smaller, the chances of more car production being shifted overseas become ever greater.
Earlier this year, a report from the University of Manchester pointed out that in 1979, 96 per cent of a JCB digger was made in the UK. Today, however, just 36 per cent of a typical JCB is sourced domestically.
That’s why the UK’s Automotive Council (a forum hosted by the government and the industry) is current trying to identify the automotive technologies of the future and try and ensure they are rooted in the UK. Even if those technologies turn out to be smart phone ‘intelligent mobility’ apps.
Meanwhile, the tide is also turning a little against overseas component suppliers. There been a steep rise in shipping costs and wages are also now rising steeply in China after a decade of super-low costs.
And there are other glimmers of hope that the UK might be able to rebuild its supply base. Jaguar Land Rover’ planned production expansion could help, as will the planned new JLR engine factory.
But after the recent natural disasters in Japan and the massive floods in Thailand hammered manufacturing, auto industry expert Professor Garel Rhys has suggested the UK should be alert to the possibility that the Japanese may now build back-up component plants in Europe’s rather more benign conditions.
And geo-political stability is an increasing issue. Land Rover bosses had to keep a keen eye on the recent unrest in Arab nations, because the wiring loom on the Discovery and Range Rover Sport is, remarkably, made in Egypt.