Now that the divisive EU referendum has been settled, attention turns to what happens next. Where, then, does the British motor industry stand?
Much of the British motor industry has been rebuilt in the past 30 years with a focus on attaining access to the EU Single Market. Out of the ashes of the British Leyland debacle has come substantial foreign investment combined with the managerial expertise that BL so sorely lacked. In 2015 Britain built 1.6 million cars.
The big question confronting the British motor industry is whether it will continue to have access to the EU Single Market without having to incur prohibitive tariffs that render its products uncompetitive? The nightmare scenario is that the EU will punish Britain for voting to leave and erect a tariff wall against British automotive imports, thus forcing the major UK-based motor manufacturers to re-locate to within the Single Market – needless to say this would result in serious job losses.
A counter argument is that Britain is such a major market for European motor manufacturers, particularly Germany, that pressure will be brought to bear on EU leaders to maintain the status quo – whether they listen is another matter.
So what is being said by the UK based manufacturers?
Mike Hawes, Chief Executive of The Society of Motor Manufacturers and Traders (SMMT), said: ‘The British public has chosen a new future out of Europe. Government must now maintain economic stability and secure a deal with the EU which safeguards UK automotive interests. This includes securing tariff-free access to European and other global markets, ensuring we can recruit talent from the EU and the rest of the world and making the UK the most competitive place in Europe for automotive investment.’
Back in February 2016 Nissan UK, which employs 8000 people in Britain across its Sunderland factory, Cranfield engineering centre and Paddington design base, and supports a further 32,000 jobs nationwide indirectly through dealerships and its supply chain, said: ‘We have a rich heritage in the UK, with 30 years of manufacturing and engineering presence, and remain committed to building and engineering cars in the country. Last year we produced more than 475,000 vehicles in the UK – 80 per cent of which are exported.
‘Our preference as a business is, of course, that the UK stays within Europe – it makes the most sense for jobs, trade and costs. For us, a position of stability is more positive than a collection of unknowns. While we remain committed to our existing investment decisions, we will not speculate on the outcome nor what would happen in either scenario.
‘We obviously want the Nissan UK plant and engineering centre to remain as competitive as possible when compared with other global entities, and each future investment opportunity will be taken on a case by case basis, just as it is now.’
The day after the EU referendum the company had this to say: ‘We will not be commenting at this time.’
Honda, which has its UK plant in Swindon, stated it remained ‘committed’ to its business in Europe as preparations continue for its Civic launch from Swindon. A spokesman said: ‘At this moment, it is not clear what conditions and rules will ultimately replace the UK’s membership of the EU. We will therefore carefully monitor developments. We continue to prepare for the production launch of the 10th generation Civic from our Swindon plant. Honda remains committed to its business in Europe.’
BMW UK, which makes the MINI in the UK, said: ‘While it is clear there will now be a period of uncertainty, there will be no immediate change to our operations in the UK. Today, we know that many of the relevant conditions for supplying the European market will have to be re-negotiated, but of course we cannot say what this means for our UK operations until those future regulatory and legislative arrangements are agreed.’
Ford, which still has a substantial UK presence, said: ‘We will continue working toward this goal with key stakeholders in the UK and across the other Member States and EU institutions to ensure they understand our concerns which mirror those of the majority of the UK and European auto industry.
‘While Ford will take whatever action is needed to ensure that our European business remains competitive and keeps to the path toward sustainable profitability, we have made no changes to our current investment plans and will not do so unless there is clear evidence that action is needed.’
General Motors’ UK arm, Vauxhall, had this to say about its Ellesmere Port factory. ‘It’s business as usual at Ellesmere Port. The plant is a key operation in Opel Group’s European manufacturing portfolio. To suggest that it may close is pure speculation without any foundation.
‘It is important for Vauxhall that negotiations on the UK’s future relationship with the EU are concluded in a timely manner. It is also important that business continues to benefit from the free movement of goods and people during this period. Communication on the development of the future relationship with the EU should also be clear and transparent. We fully support remaining part of the European Economic Area.’
This was, in part, a response to comments from the Mayor of Liverpool, Joe Anderson, who said: ‘General Motors have factories in Spain and Germany, the idea that they are going to be willing to pay tariffs to carry on making cars in Ellesmere Port and keep the workforce here is unrealistic.
‘They will simply close the factory and move production to Spain or Germany. Investment comes to our city region because businesses know we have access to the Single Market.’
Toyota, which manufactures at Burnaston, said: ‘Going forward we will closely monitor and analyse the impact on our business operations in the UK and how we can maintain competitiveness and secure sustainable growth together with the UK automotive industry and other stakeholders.’
What does the future hold for the British motor industry? Only time will tell…