Nissan’s recent decision to build future models at its UK plant will boost jobs and output in the UK automotive supply sector according to the UK auto industry’s trade association, the SMMT.
Nissan’s car manufacturing plant at Sunderland is the UK’s largest and will make over 500,000 vehicles this year.
The SMMT reports that some 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 in the UK already.
Mike Hawes, SMMT Chief Executive, stressed the importance of the competitive position of the whole sector and described recent comments from the UK government as “greatly encouraging”.
“It is important government makes it a priority to safeguard the competitiveness of this important sector as we leave the EU,” he said. “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.”
The SMMT said there is an estimated GBP6bn UK 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, the SMMT says, with the “[UK] 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.”
A number of key Nissan suppliers in the UK have also reacted to the news. Calsonic Kansei said it is considering reshoring some of its activity in the UK.
John Barnett, VP Manufacturing and Supply Chain for Calsonic Kansei, 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.”M
