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Automotive supply chain holding up in the UK, says SMMT

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Posted on 27/06/2013 by Wayne Brophy FCILT

The UK's vehicle supply chain remains in good health, despite output falling by 8.4 per cent during May 2013. The Society of Motor Manufacturers and Traders (SMMT) reported a fall in the number of completed units to 129,355 last month, however the organisation explained that this remained above pre-recession levels.

According to the SMMT, output was broadly consistent during the first five months of 2013, falling just 0.6 per cent to 632,804 units. This has helped sustain supply chain jobs across the automotive industry – within manufacturing, distribution, sales and other areas.

Demand for vehicles continues to increase in the domestic market, the SMMT said. And this has fuelled production rises of more than a quarter so far in 2013, the society claimed. However, weaker demand from European buyers has had the opposite effect, hence the 8.4 per cent reduction in overall output.

Mike Baunton, interim chief executive at the SMMT, said the fact that production levels are holding firm for the year so far is "testament to the appeal of UK-built products". He claimed that buyers around the world are interested in purchasing goods developed in the UK supply chain. And this has enabled the industry to eclipse its 2007 performance levels, despite a protracted downturn.

Mr Baunton warned that economic challenges abroad may impact on car output in the short-term, however he expects this to be a short-lived difficulty. In his view, high-value investment by global automotive companies has put the UK industry on course for "prosperity in the long-term".

Earlier this week, the SMMT called on Chancellor George Osborne to keep faith with the UK automotive industry, and consider further investment to help drive future growth. Mr Baunton claimed the sector is providing "a significant boost" to the UK economy, through strong new car sales, "unprecedented levels" of capital investment and rising manufacturing output.

He said the drive to rebuild the UK automotive supply chain, increase automotive research and development, and bring innovative UK technologies to commercial maturity, holds "great potential for future economic growth" and greater employment.

Mr Baunton claimed the vehicle supply chain offers a £3 billion economic opportunity for Britain in the short-term alone. However, he said that in order to achieve this potential, automotive businesses and motorists need long-term continuity of government policy and support.

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