Challenges driving the automotive industry supply chain

Honda’s announcement to close its Swindon factory is a further blow to the UK car manufacturing industry and the impact of this and announcements by other manufacturers in the automotive supply chain cannot be ignored.

Comments from Mike Hawes, Chief Executive of SMMT in a recent statement, highlight the issues for the supply chain:-

“Today’s announcement is a huge blow to UK automotive manufacturing, and for the Honda plant’s highly skilled and productive workforce. Whilst production will continue in Swindon until 2021, giving government and industry time to help affected employees and the local supply chain which supports a further 10,000 jobs, this is, nevertheless, devastating news.

The challenges facing Honda are not unique. The global automotive industry is facing fundamental changes: technological, commercial and environmental, as well as escalating trade tensions and all manufacturers are facing difficult decisions.”

Whilst the ‘knock on effect’ of the struggling car industry may take a while to impact the supply chain, it is likely to affect a staggering number of businesses and people employed in the industry.

Figures taken from SMMT’s Motor Industry Facts, June 2018 report that there are over 2,500 automotive suppliers in the UK, the vast majority being SMEs and 82,000 jobs. 

Whilst the motor industry in the UK will no doubt be doing all it can to mitigate the impact of these changes and champion the tradition of innovation, the ongoing Brexit uncertainty can only make this job harder.

The outlook, therefore, remains uncertain in the coming months.  If you or your clients start to feel the effects of the changing environment and need to discuss short or long term forecasts, we are always here to help.