Gowling WLG calls for government regulation and industry collaboration to ensure that the automotive supply chain remains a vital part of the UK economy

26 September 2019

Gowling WLG's latest report calls for increased government regulation, investment, and sector-wide collaboration into Connected and Autonomous Vehicles (CAVs) to support the sustainability of the UK automotive industry supply chain, in a vital move for the UK economy.

'Future supply: what will CAVs mean for the automotive supply chain?' explores how the advent of CAVs technologies might impact the established automotive supply chains that Original Equipment Manufacturers (OEMs) rely on to make their businesses work, in the wake of expensive, complex and potentially technologically risky changes for a transforming sector.

In a wake-up call for policy makers, manufacturers, and suppliers, the report suggests that whilst many Tier One businesses will continue as automation, connectivity and electrification become common place, some will become obsolete in light of rapid industry change forming increasingly complex and complicated supply chains.

Detailed in the report, this uncertainty leaves many existing suppliers, and OEMs, exposed, with the international law firm calling for long-term foresight and increasingly strategic thinking within the sector to ensure the continued success of the automotive industry in the UK.

Partner Stuart Young, Head of Automotive at Gowling WLG, said: "Dramatic technological developments allied with big changes to mobility needs, mean that cars will look very different in 20 years' time. While government investment into new industry-led programmers has increased in recent years, and is welcomed, the questions still remain as to how CAV technologies will change the established supply chains replied upon by manufacturers to make their businesses work. With such rapid development and the pace of change in the sector, the threat of the established supply chains disappearing is a stark concern for UK industry.

"The success of the automotive sector is of vital importance to the UK economy - delivering over £20 billion annually direct to the Treasury, employing over 186,000 workers and accounting for 12.8% of all the UK's export in goods. The true scale of the sector's economic contribution via the associated supply chain is upwards of £200 billion. Ultimately, it is imperative for the UK that the sector continues to be successful, which requires increased action at a policy level and greater collaboration within industry."

Experts from sector-leaders internationally featured within the white paper also call for new regulation to ensure the future success of the automotive supply chain in the wake of CAV development. With a focus on factors including manufacturing and construction, outsourcing, access to raw materials, and Brexit, they suggest that OEMs and their suppliers must be increasingly strategic in their decisions about how much and where to invest, ensuring that the right technological skill and organisational structures are in place.

This white paper is the seventh in a series that Gowling WLG is producing in conjunction with UK Autodrive. The series covers many of the most interesting elements affecting the dynamic developments around autonomous and connected vehicles, including data protection, moral algorithms (ethical software coding), cyber security, social policies, intellectual property, and social policy.

Successfully concluding in late 2018 with the world's first multi-modal journey featuring connected and autonomous road-and pavement-based vehicles, UK Autodrive was the largest of three UK consortia launched to support the introduction of self-driving vehicles into the UK. UK Autodrive brought together leading technology and automotive businesses, forward-thinking local authorities and academic institutions to deliver a major three-year UK trial of autonomous and connected vehicle technologies. UK Autodrive was supported by Innovate UK, the UK's innovation agency.

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Ben Griffiths Senior Corporate Communications Executive Birmingham