A leading industry expert has revealed that substantial growth in automotive supply chain mergers and acquisitions (M&A) is occurring due to growth in the UK automotive industry.

KPMG's UK head of automotive John Leech says he expects such activity to increase in the future. He has recently acted as corporate finance advisor to vendors of automotive suppliers on five separate successful deals in the last seven months.

"The reason for this is fast-growing UK car production, notably by Jaguar Land Rover which is requiring suppliers to attract investment to expand capacity and set up overseas facilities," he said.

KPMG's automotive M&A specialist Simon Heath said suppliers from the US, China and Europe are buying up firms, in addition to private equity.

Buyers are being attracted by growth in production and also by an onshoring trend, as UK car manufacturers have expressed a desire to onshore over £3 billion of parts which are currently manufactured overseas.

The UK automotive industry currently accounts for four per cent of gross domestic product and employs 731,000 people.