UK automotive supply chain receives welcome boost with Nissan’s decision to build new models in the UK

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Thousands of jobs in the UK automotive supply chain received a significant boost last week with the announcement by Britain's second largest car manufacturer that it will build two of its next generation models in Sunderland.

28,000 supply chain jobs in the UK are currently supported by Nissan, among a wider 78,000 dependent on all British-based vehicle manufacturers. The announcement that the next generation Qashqai as well as the new X-Trail, currently produced in Japan, will both be made in Sunderland provides certainty and confidence to invest for existing UK-based companies. It should also act as an incentive to companies not operating here already.

John Barnett, VP Manufacturing and Supply Chain for Calsonic Kansei, which supplies a variety of automotive components for car manufacturers worldwide, said, "We are a key supplier to Nissan in the UK and globally, with 1,400 staff in the North East alone, so the decision to build two new models in Sunderland is excellent news. Today, a significant proportion of the components used to manufacture cars at the plant originate from us. In future, the opportunities are now there for us to win even more business. It means we can look at reshoring some of our own supply chain back to the UK and gives confidence to global suppliers that the UK is still a good place to invest."

Mike Matthews, Managing Director of Stockton-on-Tees-based Nifco, a plastic component supplier to major automotive manufacturers, said, "This news sends a strong message that the UK is an attractive investment choice for all vehicle manufacturers. Though we supply many leading brands, 25% of our total sales go to Nissan and the decision to invest in Sunderland safeguards our 650 employees. It is exciting that the new X-Trail will be manufactured here as this presents new opportunities for us to win work supplying components to make it – I am delighted."

The news will also boost supply chain reshoring efforts to the UK, where there is an estimated £6 billion opportunity for component manufacturers as British-based vehicle makers increasingly look closer to home to pursue manufacturing efficiencies. Billions of pounds have already been invested in domestic supply chain networks to fulfil just-in-time production needs and cut the cost of logistics. This trend is having an impact, with the content of British-built cars rising from 36% to 41% over the past five years with the potential to reach 50% in the near future.1

However, the sheer rate of the industry's recent growth has resulted in a skills shortage, and for success to continue this needs to be addressed. According to the Automotive Council up to 5,000 vacancies exist in UK automotive manufacturing, which have a significant impact on business operations.2 Two in five (41%) respondents to a recent SMMT supply chain member survey said that the availability of skilled workers, apprentices and graduates could impede their company's growth over the next three years.3

Mike Hawes, SMMT Chief Executive, said, "Nissan's announcement is good news for the UK Automotive and supply chain jobs, confirming Britain as a leader in automotive production, with the comments made last week by the Secretary of State and Prime Minister also greatly encouraging. It is important Government makes it a priority to safeguard the competitiveness of this important sector as we leave the EU. This means maintaining a competitive business environment, ensuring talent can be recruited from abroad and securing the benefits we currently enjoy in the single market – including tariff free trade unhindered by any customs bureaucracy."

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