02 November 2014

The UK Car Industry Into A Headwind

The very popular Qashqai, this the new mark II version 

European car making has had a few tough years. A declining market has hurt volumes and created over capacity. High labour costs deterred investment in new plants as well. Still, some nations have fared better than others.

The UK went through much pain when it's car industry imploded and tough decisions were made. In the end market forces were allowed to run their course and a leaner industry emerged. France for example  (a nation known for government meddling), is only now letting this happen. The good news was Britain was then seen as a good place to invest and Japanese firms did just that, and virtually saved the industry. Billions of pounds was poured in over time, creating employment and tax revenue.

The bad news was the British public either hasn't known what happened or identified with these now locally made cars with Japanese logos. In 2013 over 750,000 more cars were imported into the UK than made there. Considering the brands making cars in Britain, you would have to wonder what went wrong on that point.

The MINI rolling off the line at Oxford

Part of it is apathy and ignorance of reality as mentioned. The car makers themselves may have been lax in promoting what they brought to the nation. That said, supporting brands that clearly are local by name will always be easier.

Below there are home sales of UK made cars, the percentage of total production that makes up, exported UK cars and the total production. Then to the right, events of note.

Year Home % Hm Export Total Arrivals and departures
2000 578.5 35.2 1,063.0 1,641.5
2001 598.2 40.1 894.2 1,492.4 Ford pull out
2002 582.2 35.7 1,047.7 1,629.9 MINI's first full year
2003 513.8 31.0 1,143.7 1,657.5 GM Vectra's last full year
2004 467.1 28.4 1,180.1 1,647.2 End of MGR
2005 411.3 25.8 1,185.1 1,596.4 Range Rover Sport introduced
2006 336.0 23.3 1,106.1 1,442.1 Peugeot leaves/Nissan Note enters
2007 349.1 22.7 1,185.5 1,534.6 Nissan Qashqai arrives
2008 318.0 22.0 1,128.6 1,446.6 Jaguar XF starts
2009 237.2 23.7 762.2 999.4
2010 309.0 24.3 961.4 1,270.4 Honda Jazz commences
2011 219.1 16.3 1,124.7 1,343.8 RR Evoque is here!
2012 253.1 17.3 1,211.8 1,464.9
2013 308.4 20.4 1,201.4 1,509.8 Nissan Leaf/ Jag F-Type arrive
2014 247.9 21.9 884.1 1,132.0
2014 Jan-Sep

Ford and Peugeot both left and MGR folded. That should have been the death knell of the industry but Nissan in particular saw the benefits of both designing and increasing production within Britain. With Jaguar/Land Rover enjoying a period of success too, volume is holding.

However, while some talk up the situation regarding future growth, I am unsure. Of course the new XE Jaguar will add to total production, but apart from that I don't see any immediate change of note. Honda sales in Europe are down and Toyota hasn't committed to do more with it's UK operation. GM's production is always an uncertainty. BMW MINI will be stable and Nissan has done just about all it can. 

Summary: What could have been a disaster has turned into a partial success. More local support would help, as would an investment by another car maker (unlikely). What is there is good for the UK and Europe. 

The Range Rover Evoque a big hit from day one

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