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Viewing report
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Autoparts Market Report 2005
Key Note Publications Ltd, Nov 2005
The apparent UK market for autoparts was valued at an estimated £14.21bn in 2004, up from £13.81bn in 2003 and £9.98bn in 2000. The UK is one of the ten largest motor-vehicle manufacturers in the world, and this, combined with a steady increase in the number of new vehicle registrations since 2000, has helped to boost demand for vehicle parts and accessories.
UK manufacturers' sales of autoparts and accessories increased in 2004, but imports accounted for a significant share of the UK market. The UK operates a substantial trade deficit in autoparts with other EU countries, although it has a trade surplus in this sector with countries in other parts of the world.
The autoparts industry is currently being affected by sharp increases in the prices of many raw materials. Recent surcharges have added to the cost of steel, and the prices of other products, such as rubber and energy, have also risen substantially. Some of these increases have been passed on to customers. However, the highly competitive nature of the market has meant that other costs have had to be absorbed. This is likely to have a detrimental impact on manufacturers' margins.
Suppliers of motor components are also being asked to take on much more of the research and development (R&D) work that is required to meet changing customer and regulatory demands. Vehicle manufacturers are increasingly relying on Tier 1 suppliers to deliver whole system solutions — a development that reduces the number of suppliers that have a direct relationship with the vehicle manufacturer. This trend increases the managerial and logistical support required from component suppliers.
The UK experienced a fall in the number of new vehicle registrations in 2005, and the apparent UK market for autoparts is expected to decline as a result in 2005 and 2006. However, growth is forecast to return in the second half of the decade. Imports are likely to increase their share of the market, but new product developments and the use of advanced technologies should help to keep UK producers among the leading global motor-component suppliers.
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