Responding challenges in the automotive sector



This article is part of the Greater Birmingham Chambers of Commerce’s Raise the BAR (Business Adaptability & Resilience) Campaign, sponsored by Western Union Business Solutions. For more campaign content click here. This campaign provides Chamber members with a platform to share learning and inspiration on this agenda. All views and opinions expressed below are those of the author only. 

By Richard Hill, Head of Automotive and Manufacturing Sector, NatWest

The Challenges

Our sector has always faced challenges and indeed the latest UK Automobiles & Auto Parts PMI, which NatWest released in partnership with IHS Markit, signals the sharpest downturn in business conditions across the sector for six-and-a-half years in May.

The downturn in UK automotive sector output, order books and employment in the second quarter of 2019 has been amplified by a payback from extended production schedules in March.

Looking through the noise of unseasonal production shutdowns, these recent PMI figures indicate the worst period of underlying demand since late-2012. Export sales were especially subdued in May, with automotive sector manufacturers pointing to the steepest drop in new orders from abroad since April 2009. 

With these challenges in mind, and they aren’t small, the sector is having to look at implementing changes. From becoming more agile to working out different approaches to managing risks. And I am only too aware of how companies need support to grow, but recognising where to invest remains a crucial question. It is increasingly difficult for companies to navigate to the support they require, and this remains an ongoing challenge.

The Response

The businesses we work with have great networks and it is important that they keep communicating – with their banks, with their peers, with their staff – talking and seeking support and guidance remains key.

Resilience, especially in the face of the challenges the sector is currently facing, also remains a priority – and will be important for all organisations needing to adapt to the changes that the sector is experiencing.

A modern trailblazing leadership mindset is also crucial in supporting a business through change. And while manufacturers recognise the importance of leadership, many are too busy working in the business to be working on their business. And I get this a lot, from many of the customers that I work with. I encourage everyone to recognise the importance of long-term strategic thinking, and this requires headspace – not being caught up in the minutiae of running a business. To innovate and prepare for the future – to be ‘future fit’ – requires planning. And this is where we can help and support.

Help is out there

Future Fit is an ongoing programme of research and engagement that we at NatWest have undertaken among medium-sized manufacturers. The programme started in 2015 but we have released quantitative research with qualitative analysis from a group of important industry voices. These include government, industry bodies and of course the businesses themselves. We want to bring together the voices from all the spheres important to the industry to discuss and debate the long-term needs of manufacturers. We want to create connections of support for these mid-size businesses and a collaborative environment. We have strong relationships with key support agencies such as the High Value Manufacturing Catapult, Bristol Robots Laboratory, Warwick Manufacturing Group, Made Smarter to name just a few, and bringing progressive mind-sets together undoubtedly makes a positive difference in pursuing growth. Our Future Fit very much challenges the status quo but crucially also seeks to support progressive leadership.