Car manufacturers urge government to help suppliers enter defence market

Automotive manufacturers say the UK’s defence spending boom could provide a lifeline for factories and skilled workers as demand across parts of the automotive sector weakens.

They are calling for government support to help SMEs switch from supplying the automotive industry to making parts for the aerospace and defence supply chain.

In a letter, signed by nine automotive manufacturers including Coventry-based Evtec, alongside the president of the Confederation of British Metalforming, they warn that without this support, tens of thousands of jobs could be lost. 

And they argue that orders for UK-built vehicles have weakened at a time when defence demand is increasing. The Defence Investment Plan is backed by £298bn of investment over the next four years. 

In the letter, which was shown to Sky News, they write, “Over the same period in which our automotive volumes have contracted, the country has committed to the largest sustained industrial demand signal in 40 years.

“That demand needs precisely what sits in our factories: High-integrity castings, five-axis machining, injection moulding, pressings, fasteners, tube and fabrication, surface treatment, metrology and the quality discipline that automotive volume manufacturing beats into a business.

“The capacity exists. The people exist. What is missing is the bridge.”

What are the barriers for SMEs moving into the defence supply chain?

According to the manufacturers, it can take 18-36 months to qualify a factory for aerospace or defence work. This creates a challenge for smaller suppliers that need to invest before they have firm orders.

The letter adds, “No clearing bank lends against an order book that does not yet exist, and the automotive revenue that would otherwise fund the crossing is the very thing that is falling away.”

What is the group calling for?

The group is calling for government help with certification, lower industrial energy costs and a pilot programme in the West Midlands to support companies moving from automotive into aerospace and defence supply chains.

The proposals highlight a wider opportunity for UK SMEs as defence spending rises and the government looks to strengthen domestic supply chains.

Ministers have previously said the Ministry of Defence plans to spend an extra £2.5 billion with smaller firms every year by May 2028.

The letter signatories, who are all based in the West Midlands and the North West, added, “Britain has roughly one procurement cycle in which to decide whether the parts inside its own aircraft, submarines and armoured vehicles are made by British companies, or bought from someone else’s.”

There is a precedent of manufacturers switching to defence. The manufacturers point to the period before the Second World War, when a range of British companies shifted from civilian production, including automotive manufacturing, to support military programmes.