High costs, lower demand hitting suppliers to UK vehicle manufacturers

Businesses which underpin the UK's vehicle manufacturing are being hit by high costs and lower demand, according to a new report.

The Society of Motor Manufacturers & Traders said Britain risked losing critical automotive suppliers before they can compete for future business.

Urgent action was needed to protect skills and secure investment as manufacturers decide where to award their next major vehicle programmes, said the SMMT.

Many suppliers to vehicle manufacturers were said to be in "distress" despite recent investment in the sector.

The SMMT warned that losing suppliers would strip value from UK manufacturing and make future vehicle investment harder to secure.

Some suppliers were operating at around half capacity in parts of their businesses, raising the cost of every component and weakening competitiveness, said the report.

Insolvencies among UK vehicle and component manufacturers rose by around 180% between 2016 and 2025, it was reported.

SMMT Chief Executive Mike Hawes said: "Britain cannot afford to lose the suppliers that make vehicle manufacturing here possible.

"Once their skills, tooling and expertise are gone, investment becomes harder to win and far harder to bring back.

"The opportunity to reshore component spending in Britain is real, but we cannot take it for granted.

"Industry must improve productivity and work to secure critical capability, matched by government action on energy costs, market access and targeted investment support."

By Alan Jones, Press Association Industrial Correspondent

Press Association: Finance

source: PA

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