Richard Jenkins, area director for manufacturing in the Midlands at Lloyds Bank Commercial Banking, discusses how the region is performing on the international stage…
The Midlands has a rich heritage in producing cars that people across the world want to buy. Our regional champions have been particularly successful in recent years in tapping into lucrative international markets, most recently with Aston Martin announcing a £500million drive in trade and investment with Japan.
Lloyds Bank’s annual automotive report indicates we can expect this to grow even further, with Midlands manufacturers being a key driver of this. Two-thirds (67%) of automotive firms in the region are currently looking beyond traditional domestic opportunities and either investing or planning to engage new international customers in the next two years.
Low carbon efforts
As part of this international opportunity, automotive firms are focusing more than ever on low-carbon and electric vehicle technology. A recent example of this is Jaguar Land Rover announcing that all its vehicles produced after 2020 will have an electric version.
This is in line with wider socio-political efforts to reduce damage to the environment, for example, the Government’s recently-announced plans to phase out internal combustion engines by 2040. Encouragingly, when we spoke to automotive manufacturers in the Midlands, two-thirds (67%) were already focusing on ways to develop vehicles that are more eco-friendly.
At Lloyds Bank, we promote the work of the Advanced Propulsion Centre (APC) – part of the University of Warwick – which is pioneering the establishment of the Midlands as a global centre of excellence for developing and producing low carbon vehicles.
These innovations can help contribute to devising more sustainable modes of transport. The hub offers SME manufacturers invaluable research and funding options to help business leaders develop the new products that more than half (56
We recently invited our customers to the APC to witness the research first hand and encourage them to take advantage of the access they have to the facility as our customers, and help to bolster local expertise in the sector. Local SMEs attending learned about the opportunity in the
The future of automotive exports
As echoed in our latest Business in Britain report, firms are telling us that they feel positive about their export prospects, particularly as the current exchange rate makes their goods and services more competitive overseas.
Leaving the EU creates opportunities in encouraging businesses to look again at countries outside Europe, such as North America, that could grow into lucrative export markets.
But exporting presents challenges and risks, like having the knowledge to identify new markets and waiting longer to get paid, which can increase pressure on working capital.
Partnering with a bank with global trade expertise means firms can access a range of specialist advice and funding options that can boost their chances of success.
A supportive bank can provide trade finance products to help mitigate the risks associated with trading internationally, like letters of credit and export finance.
Lloyds Bank also offers an online International Trade Portal, designed to help British businesses identify and prioritise the best overseas opportunities for their products or services.
It is crucial that manufacturers across the Midlands research markets before creating their export strategies and the portal can highlight potential trading partners, offer insight into trading conditions, identify public and private tender opportunities and provide market reports.
Exporting for the first time can be daunting, but the rewards it can generate are substantial.
Our work to support SME exporters is all part of our ongoing commitment to help Britain prosper globally. This includes helping 25,000 new exporters by 2020 and, in the process, backing the government’s goal of getting 100,000 more businesses trading overseas by the end of the decade.
With the Midlands already responsible over 20 per cent of the UK’s manufacturing output, it’s vital firms in the region invest in the research and time needed to remain relevant in the modern market, and build relationships with overseas clients to continue to bolster both the local and national economy.
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