12 September 2015

Is Britain's Car Industry Any Good?

Off to the Frankfurt International Motor Show. Just don't tell the locals

For a country that has for years consistently imported more than it has exported, borrowing is the only thing that keeps things going. Of course, maintain that record and you end up like Greece, broke (no offence to anyone from Greece but this is where the UK is slowly heading). The UK’s deficit on trade in goods and services is somewhere in the vicinity £3.4 billion in July 2015. Does the UK auto industry help the local economy to any degree?

Some people in the UK are blissfully unaware that the UK makes cars. Others feel that since it is all foreign owned, it doesn't merit support and that if all the profit goes offshore then better to buy anything but. I kid you not, some people think like that. So what is the UK car industry about and how does it deliver?

Whats' good: A vehicle rolling off an assembly line every 20 seconds means 160,000 are employed in the industry. All those workers pay tax and spend their money, generating more employment and tax revenue. Most are exported and that helps the trade deficit.

What's bad: Many UK citizens are apathetically unaware of the industry, so loyalty scarcely exists. Only 13% of the cars sold in Britain in 2014 were made there, despite several car plants. There are probably other nations have a better ratio of UK made than that!

What it means: Britain was the cradle of the industrial revolution but after years of neglect, UK manufacturing needs reviving. The car industry is a bright light in a dark place. Some trumpet the benefits that auto manufacturing brings, but balance is needed. Exports are strong but local consumption is dire. Cars are doing well but commercial vehicles not.

Most car makers can rely on local support, such as Volvo in Sweden and Fiat in Italy. Nissan doesn't sound British but it designs and builds cars in the UK. It is as British as any mass car maker will ever be. Unless that simple truth is grasped, it will mainly rely on exports to get the volume it needs to remain viable.

I will do a series on the UK industry so it is better understood. I have found out that there are car industries that are easier to follow as no one in the UK releases much data and information. I sniff around and have enough to go on, thanks to the Internet.

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