SMMT warns UK car suppliers at risk without support
Britain risks losing the specialist suppliers that keep its car factories running, the Society of Motor Manufacturers and Traders (SMMT) has warned, as high costs, weak demand and uncertainty over future vehicle programmes squeeze the firms behind UK vehicle manufacturing. The industry body published a report on 12 November 2026 calling for a £130 million Automotive Productivity Accelerator to protect skills, capacity and future investment.
The report, From supply chain risk to industrial growth, says vehicle manufacturers have identified £6.4 billion of spending on priority components by 2030 that could go to UK suppliers, including work that would replace imports. That spending will only reach British firms, the report says, if the domestic supply base is competitive enough to win it as manufacturers decide where to place their next major vehicle programmes.
Suppliers running at half capacity
SMMT says some suppliers are operating at around half capacity, which pushes up the cost of every component they make and weakens their competitiveness. Insolvencies among UK vehicle and component manufacturers rose by about 180% between 2016 and 2025, compared with around 63% across all UK businesses over the same period.
The report draws on sourcing submissions from vehicle manufacturers, together with interviews, consultations and workshops involving 26 suppliers representing £1.2 billion in turnover and 8,500 employees. Manufacturer data was gathered through SMMT's Chief Procurement Officer Forum, which represents 99% of UK-based passenger car manufacturing.
Paul Butler, chief executive of the North East Automotive Alliance, said the findings underlined the need to make sure companies survive the current challenges. He called for coordinated action on business costs, productivity, innovation, skills and supply-chain resilience, alongside support that helps smaller firms invest in the next generation of automotive work.
What the £130m plan would fund
SMMT is calling for a national Automotive Productivity Accelerator that would provide £100 million in capital grants for productivity, automation, robotics, artificial intelligence and digitalisation, and £25 million for skills. The plan would build on Supplier Readiness and Transformation pilots funded through the DRIVE35 programme in the West Midlands and the North East, and would be backed by action on costs and market access.
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."
Why the supply chain matters
Car makers depend on a network of component suppliers for everything from pressed body panels and wiring to batteries and software. When a supplier fails, production lines can stall, and the knowledge built up over years of making a particular part can be difficult to replace. SMMT argues that protecting that capability now is essential if the UK is to win future electric vehicle programmes and the jobs that come with them.
The warning comes at a difficult time for the sector. Production volumes have been under pressure, energy and labour costs remain high, and manufacturers are weighing where to build their next generation of vehicles. SMMT says the choice facing the UK is between acting now to keep its supply chain competitive or watching work, skills and investment move elsewhere.
What happens next
The industry body is urging the government to back the accelerator and to address the cost and market-access barriers identified in the report. No government response to the specific £130 million proposal had been published at the time of writing. SMMT says the prize for acting is substantial: a stronger domestic supply chain, more UK content in vehicles built here, and a better chance of securing the manufacturing investment that will shape the industry for the next decade.
