10:23 am, November 12, 2026
The UK risks losing key automotive suppliers unless the Government provides £130m in urgent funding.
That is according to the SMMT which has issued a stark warning about rising costs, falling production volumes and uncertainty over future vehicle programmes.
A new report from the trade body says businesses underpinning Britain’s vehicle manufacturing industry are increasingly under pressure, several suppliers facing financial difficulties, despite recent investment in the sector.
It says that losing key businesses would strip value from the UK’s manufacturing sector and make it harder to secure future investment.
The report, From supply chain risk to industrial growth, reports that vehicle manufacturers are set to spend up to £6.4bn on priority components for UK supply by 2030.
However, experts say domestic suppliers need support to compete for the work in the face of increased competition from overseas.
Among the biggest issues identified for British firms were high labour and energy costs, unpredictable demand and lower production volumes.
As a result, suppliers are being left with less money to invest in equipment, skills and productivity and the SMMT has now called on the Government to help pick up the slack in the form of a £130m ‘Automotive Productivity Accelerator’.
The proposed package would include £100m in capital grants for productivity improvements, automation, robotics, artificial intelligence and digitalisation, alongside £25m for skills.
The body also wants dedicated tooling finance to help suppliers meet the upfront costs of new vehicle programmes.
A further £5m match-funded ‘Auto to Aerospace and Defence Readiness Programme’ would help businesses diversify into other sectors and retain specialist manufacturing skills.
SMMT chief executive Mike Hawes said: ‘Britain cannot afford to lose the suppliers that make vehicle manufacturing here possible.
‘Once their skills, tooling and expertise are gone, investment becomes harder to win – and far harder to bring back.
‘The opportunity to reshore component spending in Britain is real, but we cannot take it for granted. Industry must improve productivity and work to secure critical capability, matched by government action on energy costs, market access and targeted investment support.’
Alongside the proposed funding, the SMMT wants action to reduce energy, employment and business rates costs.
It is also calling for full UK participation in the EU’s proposed ‘Made in Europe’ industrial policy, changes to UK-EU rules of origin to protect tariff-free trade and a workable ZEV Mandate.
Earlier this week the Government denied that any changes had been agreed to the ZEV mandate, following reports in the national media that the targets were set to be relaxed.