A West Midlands auto parts manufacturer, Sertec, recently invested £7m to buy a metal press from Spain that will allow it to become the supplier for Jaguar Land Rover (JLR). JLR’s growth over the last few years have really been phenomenal and have enticed many auto parts manufacturers to join with them to benefit from their success. Ratan Tata, owner of Tata Motors, bought JLR in 2008 and believes that within the next decade, his company’s thriving growth rate will result in countless auto part companies coming into the market.

Personally, I think that buying the metal press was a good investment. Although Sertec has used their entire capital expenditure for the next two years, the company will be rewarded sooner than they expected. As opposed to outsourcing their automotive components, the company is quite pleased that the equipment did not go abroad and that all of the jobs created with the purchase of the metal press did not leave the industry. Also, by having more auto parts manufacturers enter JLR’s supply chain, it will significantly reduce the likelihood of a major halt in production as a result of natural disasters. JLR is on the road to recovery.

Source:Financial Times 

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