A Tidal Wave for Change

Abstract

The focus of this paper concerns change in the automotive supply chain,¹ industry responses, and policy and strategic implications. Automotive components suppliers are buffeted by global trends and forces, including rising quality standards, environmental issues, and product and process innovation. Although the higher ranks of the supply chain adapt to change continuously, new technologies on the horizon threaten to make many automotive components manufacturers obsolete within some three to ten years. The West Midlands region is particularly vulnerable given its high concentration of automotive suppliers. The potential for related diversification is limited and investment is needed in new manufacturing activities (rather than assembly or sales/distribution) related to environmental, alternative power and electronic technologies. This will position the UK's automotive supply base at the forefront of technological advance against strong and aggressive global players notably from the US, Germany and the Far East. Both the private and public sectors have a strategic and supporting role to play in ensuring that opportunities are maximised. The West Midlands case study has a broader currency for initiatives targeting diversification both in vehicles production and in other manufacturing sectors. Its significance is heightened by the increasing tendency for other sectors—such as food and drink production, and domestic appliances—to adopt automotive practices.

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