Investment In Britain’s Car Industry Is ‘Pitiful’
Investment in Britain’s car industry has been described as ‘pitiful.’ Just £90 million has been invested this year, down from an average of £2.5 billion…
Investment ‘Effectively Stopped’
Only £90 million has been set aside for investments in Britain’s car industry this year. That’s down from an annual average of around £2.5 billion. The funds are usually directed towards research and development projects. The Society of Motor Manufacturers and Traders (SMMT) has claimed that £330 million has been set aside alone for no-deal Brexit preparations. This is mainly for stockpiling components, warehousing and chemical storage; all in anticipation of tariffs and chaos at customs.
Mike Hawes, the group’s chief executive, said that the industry desperately needs a Brexit deal or would need tax-cuts and subsidiaries similar to the agricultural sector in order to survive. He said, “the fear of no deal is causing investors to sit on their hands. There is political uncertainty. There is economic uncertainty. The worst outcome would be no deal, that’s what they fear and that is why they are not investing. In terms of underlying trends, undoubtedly £90m is pitiful.”
Death By A Thousand Cuts
Whilst Brexit is at the forefront of the car industry’s concerns, it’s by no means the sum total of its problems. Global markets have contracted considerably, especially in China where many automakers have heavily invested. Demand at home and abroad has fallen by double digits over the course of the year. Tighter emissions regulations have also forced manufacturers to shift production towards hybrids and full-electric vehicles; a time-consuming and costly process.
In the UK, a series of unfortunate events have seen manufacturer after manufacturer announce plant closures or a roll-back of investment. Honda is closing its Swindon plant and Ford its Bridgend facility. Nissan has announced that it won’t be producing its new X-Trail model at its vast complex in Sunderland. There are also concerns that Vauxhall with shift production from Ellesmere to the Continent. The only positive development seems to have come from Jaguar Land Rover, which has announced it’ll be building its XJ saloon in Castle Bromwich; safeguarding 2,500 jobs. It’s also planning on investing in domestic production of batteries for the cars; a first for the British car industry.
Prime Minister Boris Johnson’s approach to Brexit didn’t fill Hawes with confidence. He said, “we have a new prime minister. He said the chances of no deal were a million to one, more power to his elbow. We want an ambitious deal, we need that deal, we can’t have confidence in the future without confidence he can get a deal.”
The UK’s Car Production Is Down 45% Due To Brexit Shutdowns: https://www.autoservefleet.co.uk/latest-news/automotive-brexit-shutdowns/
Nissan Will Cut 10,000 Jobs, Raising Fears For Sunderland Workers: https://autoserve.co.uk/motoring-news/nissan-will-cut-10000-jobs-raising-fears-for-sunderland-workers/