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| Built in St Athans, Wales |
When the pandemic hit, both sales and production were drastically affected. For that 2020 was never going to be anything but a poor show. However, taking that in isolation isn't painting a picture that tells us anything. We need to take in a wider vista. Going back eight years should be enough. Below there are car and commercial production separated into two charts.
CV production became marginal as producers stopped one by one and there was no interest in protecting it. Now it's down to a van producer (PSA) and truck firm (Leyland-DAF) to keep it afloat at all. A company called LVEC is promising electric vans but it will be a job well done if that can be pulled off successfully. At least local support for CVs is stronger than in passenger cars.
Data source: SMMT.
Passenger cars: Coming up to 2015, things were improving. Some were talking up continued growth but I was wondering where that was to come from. New plants were going to lower-wage countries in Europe. The existing ones were either at capacity or being as successful as they were likely to be.
I got that assessment right but what I couldn't predict was the following. JLR moving all its new models to offshore plants, Nissan's pulling back on volume in Europe, Honda's decision to end all production in Europe and Infiniti being pulled out of Europe as soon as an offensive had commenced.
All those above factors led to four years of consecutive falls in car production. The Coronavirus certainly exacerbated the 2020 drop of 29% but it would have been down anyway. So does a breakdown of production between local and export tell us anything?
An ongoing and gradual slide of production for domestic consumption can be explained by an almost all-pervasive apathy across the UK to support locally made. That can be put down to the UK becoming a nation that has taken self-centeredness and indifference to the level of an art form. It would require greater local support to lift volume but that won't happen.
CV production became marginal as producers stopped one by one and there was no interest in protecting it. Now it's down to a van producer (PSA) and truck firm (Leyland-DAF) to keep it afloat at all. A company called LVEC is promising electric vans but it will be a job well done if that can be pulled off successfully. At least local support for CVs is stronger than in passenger cars.
Data source: SMMT.
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| Built in Luton, England |
To add a bit of speculation to the factual presentation above, 2015 optimism was probably fuelled by the strongest model offensive of the JLR Group of all time. New SUVs that were spot on (F Pace, E Pace, Velar, ), premium mass market models (XE, XF), and one of the first marketed electric car from a real car manufacturer, that could have been a "Tesla Killer".
ReplyDeleteJLR's Slovakia plant was built for additional production, and I don't think JLR uses it even now to replace the UK sites.
Nissan had strong goals in sight by Ghosn who wanted to merge Renault and Nissan into the world's largest car manufacturer.
On the down side, by far at the first place is Brexit. Nothing hit UK manufacturers like that, although the real fallout just started now after the end of the transitory period.
I believe brexiteers underestimated every possible risk, and anticipated a lot of unfounded things.
All that led to an EU-Japan trade agreement that outlined a nightmare for UK car industry.
I wonder how much leverage the govt will have to promote local industry. There are rumours that the May Government offered guarantees to Japanese companies to stay in the UK.
Rather than increase stretched UK capacity, LR looked offshore. That was why I wondered where extra predicted UK volume was going to come from. With a sales downturn, the volume that Slovakia now takes would have been useful in UK plants, which caused the UK production to fall.
ReplyDeleteAs the production decline started four years ago, any talk of Brexit is well wide of the mark. UK trade was as usual and not impeded through that time.
Sure the EU has been running around getting trade deals they spurned for years, just to beat the UK to it. The UK was not allowed to do deals until it left the EU, while the EU had no such constraint. Any future impact that cynical EU move will have is in the future.
German premium manufacturers established production sites in Central and Eastern Europe, JLR had to make a move. With Brexit this site is crucial now.
DeleteThe UK was free to negotiate deals and had 3 years since the referendum to do it. Instead they mainly managed to roll over the EU terms. At best.
Until January the UK benefited from every trade agreement the EU had.
I believe the uncertainties started in early 2016 with the referendum, although not many calculated with e serious risk of a pro-brexit result.
BTW, I specifically clicked on "notify me", but I did not receive any notifications upon your reply.
You might want to include a fresh comments window on the front page to see any recent activities.
Or you could also try a website of your own with that much quality content (but I don't want to bring this up all the time :) ) ...
I was sure that no member state of the EU is allowed to negotiate its own trade deals.
DeleteI didn't know there was a notify me feature. I used to allow comments without my first approving them but I get so much advertising spam in comments, I vet them first.
As far as I know, the EU has exclusive right to negotiate on behlf of its members, in line with the joint mandate they give. So whatever the EU agreed, the UK benefited until January.
DeleteThe UK also had 3 years since 2016 to arrange new agreements that could kick in as of January(see e.g. Japan).
From my superficial readings, the there is no deal with the US or China either.