The benefits of British manufacturing

Dawson Shanahan
Dawson Shanahan

UK manufacturing accounts for nearly a quarter of the economy and more than 7.4 million jobs according to the latest research by the Manufacturing Technologies Association (MTA). With an increase in the production of components locally, the appetite for manufacturing in the UK rather than contracting out to lower cost economies is on the increase. Jeff Kiernan, commercial director at Dawson Shanahan looks at UK trends in the automotive market and what that means to British manufacturing.

The automotive sector is truly international, with sometimes long and complex supply chains providing a flow of parts and modules for final assembly. However, an array of factors, such as the need to control manufacturing quality, being close to R&D centres and avoiding long delivery times, is driving a trend towards the increase of manufacturing in the UK.

With the looming factor of the UK’s impending departure from the European Union, a recent report in The Economist highlighted the fact that many players in the UK automotive industry are actively looking to source closer to home.

In a survey by the Chartered Institute of Procurement and Supply (CIPS), one-third of UK companies said they are looking to replace their existing offshore suppliers with British equivalents.

According to The Economist report, many UK-based carmakers want to buy locally. This is partly for currency reasons, partly due to Brexit, but also to help them comply with potential free-trade deals, which will apply ‘rules of origin’ to products. Sunderland-based Nissan is blazing a trail, opening a centre near its factory to house local suppliers. This will help the company to double (up to 80%) the proportion of parts it sources from the UK.

The article cites other automotive examples: Liberty House, for instance, recently bought the UK’s last aluminium smelter – in Scotland – and will build a wheel pressing plant nearby. Liberty will eventually have the capacity to make a quarter of the UK’s annual demand of eight million wheels, says The Economist. At the same time, Liberty expects to double production of safety bars at its tube-processing plant in Birmingham.

Big reversal

The manufacturing sector’s contribution to UK GDP halved to 11% between 1990 and 2009, as many companies moved manufacturing offshore in the quest for lower-cost production. Now, that tide is beginning to turn back – albeit slowly.

There are many benefits to manufacturing in the UK and these include:


  • Higher product quality: it is more straightforward to audit local manufacturing facilities, and re-order (or avoid) faulty parts – while building a rapport and trust with a local company is inevitably easier

  • Shorter lead times: delivery times may be a few weeks for local manufacture, even for quite complex parts, but may be a few months from, say, China

  • Smaller minimum order quantities: small, multiple orders are practical with local suppliers; and

  • Proximity to R&D centres: cutting-edge manufacturing companies rely on their intellectual property in order to thrive, so being close to their main research centre makes sense. On the IP front, rights are easier to enforce on home territory

  • Comparable prices: wages in developing economies are rising, which, combined with the current low value of sterling, makes UK prices ever more competitive
Copper demand

The current rise in UK-based manufacturing of copper-based components is a good example – from power semiconductors and solenoids to components for electric vehicles. Economics is the overriding reason, but there are several factors at work here.

At Dawson Shanahan, as we celebrate our 75th year anniversary in precision engineering, we have seen a rising demand for cold formed copper components. The main reason is that rising demand for electric vehicles – which use four times more copper than a traditional car – will push up the cost of the material.

One way to offset this will be to process copper more efficiently, using a technique like cold forming, which has around 80% lower scrap rates than other machining processes. Cold forming can be used to make many components – such as connectors – so could become a key local technology in this industry in future.

Automotive focus

Warwick Manufacturing Group (WMG) recently surveyed more than 250 UK-based manufacturing organisations comparing results for the sector against the overall picture. The WMG report includes a special focus on the automotive industry, comparing results for the sector against the overall picture. This was based on the 35 (out of a total of 262) automotive sector respondents to the survey. The UK automotive industry has placed a greater focus on being closer to R&D centres as well as reducing costs and avoiding capacity bottlenecks.

In the overall survey, this was cited in 56 cases – around 20%. For the automotive sector alone, this was given as a reason in 18 cases – a prevalence of just over 50%.

This could indicate that R&D is a strong driver in the sector – and that rooting R&D in the UK can lead to manufacturing opportunity – a strategy being supported by the Government’s automotive industrial strategy, said the report.

This strategy clearly lays out how the Government is planning on supporting the automotive sector including:

Advanced Propulsion Centre


  • £500 million over 10 years to 2023 to research, develop and industrialise new low-carbon automotive technologies in the UK
Automotive R&D

  • £225 million from 2023 to 2026 to support R&D in the sector
Transition to ultra-low and zero emission vehicles

  • £246 million for the Faraday Battery Challenge to make the UK a world leader in the design, development and manufacture of batteries for the electrification of vehicles

This includes:

  • £78 million for the Faraday Institution (100% public funding to support fundamental academic research)

  • £80 million for the Faraday National Battery Manufacturing Development Facility; and

  • £88 million for the Faraday Battery Challenge Innovate UK programme
Shaping the future of mobility

  • £250 million to position the UK as a global leader in the development and deployment of connected and autonomous vehicles (CAVs)

This includes:

  • £150 million for collaborative R&D projects; and

  • £100 million for CAV testing infrastructure

The deal with the automotive industry – which often sets the agenda for manufacturing – and the desire is clear; our long history of automotive excellence must continue and that manufacturing tides are turning.

Dawson Shanahan www.dawson-shanahan.co.uk

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Dawson Shanahan

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