NW 2013: Grinding the gears

It has been refreshing to see the resurgence of investment in automotive manufacturing plants relative to the doldrums that they were in only two or three years ago.

Much of the demand for product has come from overseas which is particularly relevant to the plants in the North West; Bentley at Crewe and Jaguar Land Rover at Halewood. The reinvestment in the Vauxhall Plant at Ellesmere Port is more reliant on local markets with the investment here being in green technology.

They say that every one job created in a car plant will create seven in the supply chain. With manufacturing plants increasing their shifts, most notably Jaguar Land Rover going to 24-hour shifts, this will have a significant impact upon the supply chain. Jaguar Land Rover, served by DHL, took 400,000 sq ft of warehousing in Ellesmere Port to supply the plant in Halewood. In addition, in recent weeks TTAS took 140,000 sq ft at Jupiter Knowsley Business Park and Acumen 50,000 sq ft at Speke Boulevard both of which are related to the activity at JLR.

There is also evidence that local suppliers mirror these increases in shifts which create jobs but also create congestion on established industrial estates. Increased shifts means increased parking which is difficult to accommodate on existing estates which tend to be a standard 40% site cover. This is acerbated with the just-in-time delivery platform required and associated volume of HGV movement as a result.

Current demand therefore is being met mainly within the existing infrastructure of the supply chain. However, in the long term this is unlikely to be sustainable. From research it is reported that a number of suppliers are seeking to reinvest in new plant and machinery which often requires new buildings. The current funding markets and general economic uncertainty however are major barriers to this investment.

So while there have been some enquiries in the market we expect pent-up demand to rise as confidence in the economy increases and funding constraints are relaxed.

• Andrew Aherne, director of industrial and logistics, Lambert Smith Hampton in Manchester