Peter Palmer: Letter From The UK: Car Production In Crisis

As production thins from an ongoing Brexit debate, the future looks uncertain.
How will the auto industry in the UK weather the current storm; is there a silver lining?
Geoff Maxted of DriveWrite Automotive Magazine examines in this Letter From The UK.

With the industrial problems of the 20^th Century long forgotten, it seemed as if Great Britain had secured a strong and burgeoning future for the car industry with the likes of Nissan, Toyota, and Honda among the foreign brands building cars in the UK. Alongside them are Mini, Rolls-Royce, Bentley, Jaguar Land Rover and Vauxhall, despite this latter group being original British brands but now all foreign owned these days; but the cars are at least still made in Britain. Things were looking good and jobs seemed secure.

Then we had the Brexit vote.

Drop In Production: The Brexit Quagmire

Sadly our politicians and their European counterparts had other ideas. We are, like a man trapped in quicksand, now firmly stuck in the gloopy Brexit quagmire of confusion and uncertainty. It’s had a knock-on effect too: Official figures show UK car output fell 14 percent in March of this year. Only 126,195 cars were made. That’s the 10th consecutive monthly drop, thanks to the combined issues of a slowdown in foreign markets like China, and of course the Brexit insecurity, whether justified or not.

Not for the first time, the industry has repeated its warning that the sector stands to suffer a lot more if the country leaves the European Union without a deal, pointing to exports which account for nearly four out of every five cars made in Britain, being down by 13 percent. Further they predict output would fall in 2019 to 1.36 million vehicles from 1.52 million last year and that’s assuming, in their view – and, for balance, it is an opinion that is not universal – that some form of transitional deal with the EU is done.

Bentley employs over 4000 people at its Pyms Lane headquarters in Crewe, Cheshire. On average, it takes 130 hours to build a Bentley Bentayga (pictured here) and every vehicle on the production line undergoes a 500 to 650 point checklist before the final sign off. The Pyms Lane factory in Crewe has been the home of Bentley since 1946. Photo: Bentley Motors.

Continued Slowdown: One Hard April

April figures continued to show a decline across most sectors with registrations of the ever popular super-mini and small family car segments surprisingly low. Even zero-emission, plug-in hybrids experienced a significant decline. It has to be serious when the most popular vehicle types take a hit.

It wasn’t that long ago the motor industry was on track to produce two million new vehicles annually by 2020. That aim now seems impossible with our international reputation as a stable and attractive business environment undermined. Thus the forecast, should we rely on World Trade Organization rules which may include import tariffs when trading with the EU, is grim: a strong reduction in builds and the added consequence of damage to employment.

Of course, nobody really knows which way the pendulum will swing; the industry may ride out the storm, but from the cheap seats, it is not looking good.

Photo: Jaguar Land Rover.

Related: The Brexit debate is causing confusion for the automotive industry.

Waiting With Bated Breath

And so we wait, making sure not to hold our breath for a speedy resolution. The UK government has delayed the Brexit deadline until October to try and resolve this thorny issue. If our dithering politicians and the negotiators on the other side of the channel are to sort this out, then they need to pull a rabbit from the hat a bit sharpish. It is after all a matter of economics when you come down to it, and we can but hope they see it because it affects us all.

Questioning The Future

The British people have lost faith in their leaders. Major government sponsored projects like the North-South High-Speed Railway (known as HS2), the Crossrail metro in London, and even a new emergency radio system are delayed and way over budget. The level of incompetence at the top is staggering, yet they are blind to it all. No wonder the motor industry doesn’t know what to do next.

Geoff Maxted is a motoring writer, photographer, and author of our Letter From The UK series. Follow his work on Twitter: @DriveWrite