U.K. Government Lends Hand to Auto-Parts Producers

The U.K. government creates a £24 million ($40.7 million) fund to help auto-parts makers design, develop and manufacture new tooling.

Business Minister Michael Fallon says the Tooling Funding Program will help components manufacturers that otherwise would fail to acquire financing.

Fallon says the government automotive industrial strategy aims to secure the long-term future of the sector by growing the U.K. share of the value chain, and by getting ahead of the game in R&D for the vehicles of tomorrow.

Society of Motor Manufacturers and Traders CEO Mike Hawes says the new program is a welcome initiative that should help U.K. parts makers compete and win new business.

“A competitive supply chain is a vital ingredient in a successful automotive industry,” Hawes says in a statement. “Yet many U.K. suppliers have found it difficult to access funding, restricting their ability to exploit the local opportunities created by the expanding vehicle manufacturing sector.”

Fallon announced the funding at the Automotive Council U.K.’s “meet the buyer” event, run by the SMMT and U.K. Trade and Investment’s Automotive Investment Organization (AIO).

The event aims to match U.K. supply-chain companies to vehicle manufacturers and Tier 1 suppliers with particular sourcing requirements. Some of the world’s biggest vehicle producers attended, including Aston Martin, General Motors and Leyland Trucks.

The Automotive Council U.K., established in 2009, is a joint government-industry organization assigned the task of establishing the U.K. automotive sector as a world leader.

The AIO, created in June 2013 and led by former Ford U.K. chairman Joe Greenwell, already has drummed up £457 million ($775.8 million) worth of business for U.K. companies. It has obtained funding for 80 projects and secured 5,600 supply-chain jobs.

Greenwell says U.K. car manufacturing has global appeal, with exports accounting for 80% of total output in 2013.

“The challenge is to increase the size of the U.K.-based supply chain, which could bring in an extra £3 billion ($5.1 billion) a year to British firms,” he says. “Meet the Buyer events are a very important way of bringing together potential overseas investors and the purchasing leaders of our U.K. automotive industry.”