Is Brexit the end for the British car industry?



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Sign Of The Times: Honda's name outside its Swindon plant, which it plans to close with the loss of more than 3,000 jobs. (Photo: Steve Parsons / PA Images via Getty Images)Getty

Thirty years ago, Honda's investments in Britain were considered a rare ray of light for Prime Minister Margaret Thatcher's industrial strategy.

After a decade of industrial closures from shipyards to steel mills, investments in Honda's, Nissan's and Toyota's new British plants have brought the "English patient" back to life, as German car bosses were later to mark the industry. British.

Attracting generous incentives and the opportunity to sell directly in a unified Europe, the auto industry has become the poster for foreign investment.

Over the next three decades, MG Rover, the last British manufacturer of production cars, was broken. The Birmingham-based group collapsed and its jewels of Land Rover, Mini and MG were sold to Americans, Germans and Chinese. .

They joined other British foreign-owned automobile factories: Peugeot in the Midlands, Vauxhall in Luton and near Liverpool and Ford in Merseyside and London.

Wimbledon effect

It did not matter that Britain no longer owned its car industry.

Before the days of Andy Murray, he witnessed a "Wimbledonization" as the industry metamorphosed into an arena where national talents could not rank among the best but foreign players were flourishing.

The Japanese invasion was considered extremely successful. Nissan's Sunderland plant has become Europe's most productive car plant, outperforming all of its rivals in North America.

With the Indian company Jaguar Land Rover, the takeover of Vauxhall by Peugeot and the parent company of Citroën, the PSA Group, and the listing of Aston Martin Lagonda on the London Stock Exchange, the sector has acquired a new reputation.

Brexit Blow

The volatile nature of international trade is again noticeable. It is expected that Honda's Swindon site – the company's only production site in the European Union – will close in 2022 with 3,000 job cuts.

This follows the announcement of 4,500 job losses at Jaguar Land Rover last month and the announcement that Nissan's new X-Trail model will be manufactured in Japan, not Sunderland.

Although Honda may not specifically mention Brexit, other automakers have made it clear that the UK industry is at risk of serious damage.

Jaguar Land Rover and Nissan both admitted that Brexit was partly responsible for their ads, while Toyota and Ford warned of negative consequences in the event that Britain would publish the European Union without a negotiated agreement.

So what are the chances of long-term survival of the remaining British factories with foreign capital?

warnings

"Car manufacturers have repeatedly warned the government against the Brexit threat to British industry," said Christian Stadler, professor of strategic management at Warwick Business School.

"It's a blow for the UK auto industry and for the thousands of workers whose jobs depend on it.

"The global economy is slowing down, affecting key markets such as the US and China." The crackdown on diesel engines has also affected sales.

"These difficult conditions will encourage businesses to be more competitive with their prices."

Stadler thinks that British car manufacturing could be bad news if vehicles are subject to new tariffs after Brexit, as the new agreement between Japan and the EU could soon make it cheaper to build cars elsewhere .

In addition, he observes that the supply chains of most British-made cars cross the English Channel repeatedly as parts are shipped, making just-in-time production of the industry extremely vulnerable to disruptions. due to border delays related to Brexit. .

Add all this, he concludes, and the UK "is starting to look like a less attractive place for international companies that build cars."

Brexit is still very controversial in the United Kingdom, which opens up a new front for an already feverish debate. Honda may not be the last of British automakers to enter the auto industry.

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Sign Of The Times: Honda's name outside its Swindon plant, which it plans to close with the loss of more than 3,000 jobs. (Photo: Steve Parsons / PA Images via Getty Images)Getty

Thirty years ago, Honda's investments in Britain were considered a rare ray of light for Prime Minister Margaret Thatcher's industrial strategy.

After a decade of industrial closures from shipyards to steel mills, investments in Honda's, Nissan's and Toyota's new British plants have brought the "English patient" back to life, as German car bosses were later to mark the industry. British.

Attracting generous incentives and the opportunity to sell directly in a unified Europe, the auto industry has become the poster for foreign investment.

Over the next three decades, MG Rover, the last British manufacturer of production cars, was broken. The Birmingham-based group collapsed and its jewels of Land Rover, Mini and MG were sold to Americans, Germans and Chinese. .

They joined other British foreign-owned automobile factories: Peugeot in the Midlands, Vauxhall in Luton and near Liverpool and Ford in Merseyside and London.

Wimbledon effect

It did not matter that Britain no longer owned its car industry.

Prior to the time of Andy Murray, he had attended a "Wimbledonization", with the industry morphing into an arena where national talent was failing to stand out but foreign players were unable to stand out. bloomed.

The Japanese invasion was considered extremely successful. Nissan's Sunderland plant has become Europe's most productive car plant, outperforming all of its rivals in North America.

With the Indian company Jaguar Land Rover, the takeover of Vauxhall by Peugeot and the parent company of Citroën, the PSA Group, and the listing of Aston Martin Lagonda on the London Stock Exchange, the sector has acquired a new reputation.

Brexit Blow

The volatile nature of international trade is again noticeable. It is expected that Honda's Swindon site – the company's only production site in the European Union – will close in 2022 with 3,000 job cuts.

This follows the announcement of 4,500 job losses at Jaguar Land Rover last month and the announcement that Nissan's new X-Trail model will be manufactured in Japan, not Sunderland.

Although Honda may not specifically mention Brexit, other automakers have made it clear that the UK industry is at risk of serious damage.

Jaguar Land Rover and Nissan both admitted that Brexit was partly responsible for their ads, while Toyota and Ford warned of negative consequences in the event that Britain would publish the European Union without a negotiated agreement.

So what are the chances of long-term survival of the remaining British factories with foreign capital?

warnings

"Car manufacturers have repeatedly warned the government against the Brexit threat to British industry," said Christian Stadler, professor of strategic management at Warwick Business School.

"It's a blow for the UK auto industry and for the thousands of workers whose jobs depend on it.

"The global economy is slowing down, affecting key markets such as the US and China, and repression of diesel engines has also affected sales.

"These difficult conditions will encourage businesses to be more competitive with their prices."

Stadler thinks that British car manufacturing could be bad news if vehicles are subject to new tariffs after Brexit, as the new agreement between Japan and the EU could soon make it cheaper to build cars elsewhere .

In addition, he observes that the supply chains of most British-made cars cross the English Channel repeatedly as parts are shipped, making just-in-time production of the industry extremely vulnerable to disruptions. due to border delays related to Brexit. .

Add all this, he concludes, and the UK "is starting to look like a less attractive place for international companies that build cars."

Brexit is still very controversial in the United Kingdom, which opens up a new front for an already feverish debate. Honda may not be the last of British automakers to enter the auto industry.

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