Industries at risk – automobile

Industries at risk – automobile
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FT December 22, 2016. Of all cars made in Britain (some 1,700,000 in first 11 months of 2016) more than half are sold to EU,  from where about half the components are sourced. The supply chain is integrated to such an extent some parts cross the Channels five times before final assembly. The crankshaft for the BMW mini crosses three times. (Guardian March4, 2017). There is a five per cent tariff on components.

Several British car plants including Nissan’s in Sunderland, and Honda’s in Swindon were built to make cars for the European market and rely on free access to Single Market to remain competitive.

FT. On February 18, 2019 Honda announced it would stop production at Swindon in 2021  The announcement come two weeks after Nissan announced it would not build its new SUV at Sunderland, the biggest UK car factory.

These announcements coincide with a new trade deal between Japan and the EU reducing tariffs on cars from 10 per cent to zero by 2017. There is therefore no further advantage for these two companies to continue manufacturing in the UK especially with great uncertainty about access to EU markets and suppliers after October 31, 2019, the new date for the UK’s exit from the EU.

FT June 26, 2019. The UK Society of Motor Manufacturers estimates it could cost the industry £70m a day due to delays at the border in the event of a no deal Brexit. If the 1100 trucks delivering 42m components were held up for 24 hours production stoppages could cost£50,000 per minute.

3500 jobs will go at the Swindon plant a similar number among local suppliers.