UK Car Industry Investment Plummets Due To Brexit

[Lancasterclaret]

Poster posts article telling people what is happening, rather than an opinion piece, but its not good for Brexit fans.

Brexiteer then posts comment that he wishes people posted more about what is happening, and laments the lack of such posts.

*Monday morning, its going to be a long one*

[Paul Waine]

Fair point, but selling top of the range cars to the USA and China, (whilst the pound is weak, partly due to Brexit uncertainty), is not really comparable to the big picture genuinely concerning the industry, which concerns future investment.

Hi nil_d, isn't the UK car industry's "big picture" that a lot of "big" cars are built in the UK for export around the world? I know Vauxhall are still manufacturing in the UK, though I'm not sure if they include the small Vauxhall/Opel cars in their UK manufactured range. Other manufactures, JLR - all bug cars, Nissan - mix of big/small?, Toyota - mix? Honda - mix? BMW - Mini is now a "big" car, Rolls Royce - big, Bentley - big.

The real economy issue is how much value added is created in the UK.

Of course, that's also where Germany's economy is strong in manufacturing Mercs, BMWs, Audis...

[taio]

The Times isn't a pro-EU paper.

None of the Murdoch ones are.

Just because it doesn't come out with tabloid headlines like "Up your Juncker" and puts it slightly more diplomatic language doesn't change that.

I think its fairer than most if that helps, but lets not pretend its not.

The Times published many articles supporting Remain, and they published a front cover against Brexit just before the referendum

[Lancasterclaret]

But what % of that is for EU trade Paul.

Whether we like it or not, or whatever cause we support, no one wants to see our economy hit because that will affect us all.

We need a transitional agreement asap.

There is more than the economy at stake here, but if we can minimise the hit to that, then we can minimise the other dangers as well.

[Paul Waine]

The Times isn't a pro-EU paper.

None of the Murdoch ones are.

Just because it doesn't come out with tabloid headlines like "Up your Juncker" and puts it slightly more diplomatic language doesn't change that.

I think its fairer than most if that helps, but lets not pretend its not.

I read what I read. Maybe the owner allows The Times the freedom to do what works for them?

What is the issue you have with Singapore? It's a great little island economy.

[Lancasterclaret]

It used as an example of the what some Brexiteers want the UK to be, a bigger version of the coast of Europe.

The problem is that wages and regulation aspects of that to start with.

But yes, Singapore is a fantastic place to visit, and a economic miracle.

[Paul Waine]

Brexodus has begun. We EU nationals know staying on is too big a gamble
Joris Luyendijk

Guardian: https://www.theguardian.com/commentisfr ... -uk-brexit" onclick="window.open(this.href);return false;

First two paras below:

"It will not happen in spectacular ways, so do not expect TV footage of hordes of well-heeled EU nationals making for Heathrow airport or the Channel tunnel. Rather it will be a steady, inexorable drip-feed. It has already started and as the true implications of Brexit sink in the number will swell. Call it the Brexodus: well-educated EU nationals with the global job market at their feet turning their back on a country they had thought of as a good and safe place to make their homes.

A Deloitte study, published this week, reveals that nearly half of all highly skilled EU workers could leave the UK within five years. This may have been news to many Britons, but not to the 3 million EU nationals in this country. Some of us have already left and others are actively making plans. Many know at least one EU national or family who have left already. Everybody is considering their options – and for good reason."

[Sidney1st]

The article says that last year's £1.66bn was the lowest on record. That figure for this year of £322m is absolutely miles off even that, with just 6 months left.

It's crystal clear that Brexit is to blame for this.

I just wish Leavers would wake up and see the damage they're doing to the UK.

Why is it crystal clear?

When Ford announced about 5yrs ago they were moving production of the Transit away from Southampton to Turkey, who would you blame for that?

How many new models requiring new manufacturing equipment are being planned for the next few years?
Assuming you know that answer, what extra equipment is needed to make these new models?

How much money is the upgrading going to cost?

Or is it simply that the current equipment is at the required standard and doesn't need much investment this year...

[Lancasterclaret]

if that is true, I'd hope its because they were uncomfortable with the economic situation and the future prospects, rather than anything more sinister.

[UpTheBeehole]

Just googled Singapore's Economy.

Puts a large part of its success down to 'stable political environment'

That immediately rules the UK out of following suit - our Tory government creates instability for the nation at every turn

[Sidney1st]

Labour are more stable are they?

Aye alright then.

[UpTheBeehole]

Why is it crystal clear?

When Ford announced about 5yrs ago they were moving production of the Transit away from Southampton to Turkey, who would you blame for that?

How many new models requiring new manufacturing equipment are being planned for the next few years?
Assuming you know that answer, what extra equipment is needed to make these new models?

How much money is the upgrading going to cost?

Or is it simply that the current equipment is at the required standard and doesn't need much investment this year...

Here comes Sidney with his one example argument.

Just like his argument that NHS already outsources loads of operations just because his was, once.

The figures are crystal clear, there's been a significant drop in investment and production within the UK car industry following the vote to Leave.

[JohnMcGreal]

Here comes Sidney with his one example argument.

Just like his argument that NHS already outsources loads of operations just because his was, once.

I've said before that if a nuclear weapon was fired in anger tomorrow, Sidney1st's response would be a shrug of the shoulders and a comment along the lines of 'nuclear weapons have been used before.'

[Sidney1st]

Nope, you've never said that before on here JohnMcGreal.

There is nothing that would justify the use of Nuclear weapons.

[taio]

I've said before that if a nuclear weapon was fired in anger tomorrow, Sidney1st's response would be a shrug of the shoulders and a comment along the lines of 'nuclear weapons have been used before.'

Bit of a strange post and just putting words in someone else's mouth.

[UpTheBeehole]

Nope, you've never said that before on here JohnMcGreal.

There is nothing that would justify the use of Nuclear weapons.

So we should scrap Trident then?

That'd fill quite a bit of the Brexit black hole at least.

[Sidney1st]

As for the drop in investment, for the last 50-60yrs the automotive industry in the U.K has always been evolving/changing.

Car manufacturers have come and gone, some moved production to other parts of the world to save costs, others went bust and disappeared for various reasons.

There are points where the investment may drop whilst new models are designed etc.

I used Ford Transit as an example because it's valid, a company took work out of the Uk before Brexit was voted on.
I know you prefer to ignore that sort of fact, but it happens and it was recent enough that it is a valid point.

Cars will still be built in the UK, it just may mean different manufacturers step in to replace them.

[claretdom]

I changed £500 into euros at the weekend. Imagine my shock when I got more than 17 euros in exchange, that was the figure I was expecting after the running commentary we got everytime it went down from 1.17 to 1.16 to 1.1555 and so on due to the £ collapsing after brexit.

[Sidney1st]

So we should scrap Trident then?

That'd fill quite a bit of the Brexit black hole at least.

I'm not sure if I'm honest.

I don't think it should have as much money chucked at it, plus I don't think we have full control of our nuclear arsenal do we?
Don't the yanks have some sort of say over it all?

If we didn't have it, I can't see us suddenly being bombed as a result and the money could be reinvested in conventional armed forces that are underfunded.

[UpTheBeehole]

I changed £500 into euros at the weekend. Imagine my shock when I got more than 17 euros in exchange, that was the figure I was expecting after the running commentary we got everytime it went down from 1.17 to 1.16 to 1.1555 and so on due to the £ collapsing after brexit.

Your £500 would have got you €655 the day before the Brexit vote. €720 the summer before.

What did it get you this time? €570?

Real do pal.

[Lancasterclaret]

The argument that we should scrap Trident because Brexit has f**ked the economy so we can't afford to pay nurses needs some work.

[Rowls]

All the FT are doing is highlighting the need for an interim agreement to protect jobs and investments.

There IS an interim agreement.

It's called keeping existing arrangements.

The FT are a highly political pro-EU paper causing mischief. They get away with it far too often because daft people imagine that they're blandly reporting implacable financial information.

They aren't.

[UpTheBeehole]

The FT is a highly pro-business paper.

Brexit is very bad for business, that's why the FT may appear to have a slant against it

[claretdom]

Your £500 would have got you €655 the day before the Brexit vote. €720 the summer before.

What did it get you this time? €570?

Real do pal.

Has it ever been that price before ? I used to be able to get over double back when changing to pesetas but your beloved euro is way below that figure.

It is like we have never had a recession before brexit. I could have got more previously yes I could also have got very similar, I am just glad I don't let these things get to me it allows you to enjoy life rather than searching for misery and spreading it. Each to their own though be a boring place if we all did the same.

[UpTheBeehole]

I'm Alright Jack is back!

[claretdom]

Ahhh it makes sense now.

Someone who doesn't cry constantly is a member of the I'm alright Jack party. Meanwhile you continue with your membership of the "replacing the stiff upper lip with the lower trembling one"

Must be tough being so insular

[JohnMcGreal]

There is nothing that would justify the use of Nuclear weapons.

In that case I apologise, Sidney1st.

It was more of an observation that when 'X' happens, your automatic response tends to be 'it's already happened before'.

The nuclear option was probably a bit OTT on my part!

[Lancasterclaret]

There IS an interim agreement.

It's called keeping existing arrangements.

When was this agreed BWLIAC?

[Sidney1st]

In that case I apologise, Sidney1st.

It was more of an observation that when 'X' happens, your automatic response tends to be 'it's already happened before'.

The nuclear option was probably a bit OTT on my part!

I am like that a lot, but not about Nuclear weapons, have a read of Nevil Shute's book, On The Beach.

As for the Transit comments, I felt it was relevant as it's recent.

[RocketLawnChair]

I have worked in the UK automotive industry all my working life (nearly 30 years) and its been in the **** more than out of it for the majority of that time.

[Masham Ale]

Shocking figures reported in the Financial Times in respect of investment in the UK car industry.

In 2015 £2.5bn was invested by manufacturers
In 2016, this fell to £1.66bn.

So far this year, just £332m has been invested in the industry, with £240m of that coming from one retooling project.

Brexit is proving to be catastrophic, already.

https://amp.ft.com/content/0c3427b2-5ce ... 55f264aa8b

JLR (Jaguar Land Rover) invested £3.4bn in the last financial year and predict to spend over £4bn this year!

[UpTheBeehole]

JLR (Jaguar Land Rover) invested £3.4bn in the last financial year and predict to spend over £4bn this year!

I don't think they did.

[Sidney1st]

They possibly did invest a lot though, even if it wasn't that amount.

New Land Rover Velour and Discovery 5 out this year.
Some of the parts will be the same as other models, but others will be new to those models.
I know this because I've checked.

Jaguar F-Pace, their SUV on the market and selling well.

Massive percentage of dealerships are being combined dual Jag/Land Rover dealerships and I expect some financial input from JLR there too.

[Lowbankclaret]

I never knew car manufacturing plants had to 'bid' for the work from their parent company.
That's a bizarre way to do business if its true.

That common practice in engineering, my company categorise's components as Make. Make/buy. Buy. If it is make then its because it gives us a competative edge or its new secret type technology. Make/ buy means the companies manufacturing plants can bid against worldwide manufacturing plants. If they are competative they get the work but it will be put out for quote every few years.

[Lowbankclaret]

Rolls Royce= fake news

Why is this fake news????

[thatdberight]

The Times isn't a pro-EU paper.

None of the Murdoch ones are.

Just because it doesn't come out with tabloid headlines like "Up your Juncker" and puts it slightly more diplomatic language doesn't change that.

I think its fairer than most if that helps, but lets not pretend its not.

But they cleverly disguised their view by coming out to Remain last year. Damn, they're devious.

[Masham Ale]

I don't think they did.

http://c.jcms-api.com/download/c6101b6f ... nfinal.pdf" onclick="window.open(this.href);return false;

page 21 - "JLR’s strategy is to achieve sustainable profitable growth by investing proportionally more in new products, technology and manufacturing capacity. Consistent with this, FY18 investment spending is expected to be over £4b, including investment in the new Slovakia plant"

page 24

table.JPG (120.14 KiB) Viewed 3355 times

[nil_desperandum]

page 21 - "JLR’s strategy is to achieve sustainable profitable growth by investing proportionally more in new products, technology and manufacturing capacity. Consistent with this, FY18 investment spending is expected to be over £4b, including investment in the new Slovakia plant"

So you're including over a billion pounds worth of investment in Slovakia to support your case? Seems odd to say the least.

[Masham Ale]

So you're including over a billion pounds worth of investment in Slovakia to support your case? Seems odd to say the least.

Not really that odd,it's part of the balance sheet for a company undergoing globalisation. Even without the Slovakian plant, investment is still way over that quoted in the FT. The article headline is doom and gloom for the UK car industry. Investments quoted are of the wrong order of magnitude and in spite of the year on year heavy investment & Brexit, JLR posted profits of over £1.5bn again.

[nil_desperandum]

Not really that odd,it's part of the balance sheet for a company undergoing globalisation. Even without the Slovakian plant, investment is still way over that quoted in the FT. The article headline is doom and gloom for the UK car industry. Investments quoted are of the wrong order of magnitude and in spite of the year on year heavy investment & Brexit, JLR posted profits of over £1.5bn again.

This is what Ralf Speth the boss of JLR thinks of Brexit:
Europeans have been boycotting British cars since the Brexit vote, according to the boss of the nation’s biggest auto firm, Jaguar Land Rover. Dr Ralf Speth, chief executive of JLR, also joined senior figures at rival firms in warning that a hard Brexit would damage the car industry, which supports around 800,000 jobs.
He warned that the car industry would feel the pinch much more in the event of a hard Brexit that results in tariffs being slapped on to goods traded with the EU. He said carmakers would face a double whammy as import tariffs force up the cost of the parts they buy from Europeans and higher export tariffs make JLR vehicles less affordable for Europeans. “If we face higher tariffs than anybody else, then it’s quite clear that it’s reducing the competitiveness of our products, especially in Europe,” said Speth.

He said the exact cost to JLR could not be calculated, although reports this summer suggest that the firm believes it would miss out on £1bn in profit over 10 years if UK goods incur tariffs at the World Trade Organisation rate of 10%.

Speth said JLR had not changed its investment plans in the light of Brexit, but hinted that the company may have to spend its money elsewhere. “We have to realign all of our thinking and work on how to handle this Brexit best,” said the German. Asked if that could include investment, he said: “Everything.”

[dsr]

He said the exact cost to JLR could not be calculated, although reports this summer suggest that the firm believes it would miss out on £1bn in profit over 10 years if UK goods incur tariffs at the World Trade Organisation rate of 10%.

What was his estimate of the increased sales in the UK when the German imports are also hit by 10% tariffs?

[nil_desperandum]

What was his estimate of the increased sales in the UK when the German imports are also hit by 10% tariffs?

He doesn't say, but presumably - [when speculatively talking about his company's profits or losses] - he's talking about net figures.
But he's a lot more successful at running a business than anyone on here, and his company has been making billions, so I'm not going to challenge him on it.

[Sidney1st]

His company?

Its owned by Tata last I checked, who're Indian and he doesn't sound Indian.
Petty I know, but just pointing it out.

[Mala591]

A very good way of keeping investment (and attracting new investment) is to have low corporation tax. We might have to reduce it to 15% if UK car manufacturers are having doubts about future investment.

Exactly the opposite of what the labour party are intending to do ?!?

[UpTheBeehole]

Car manufacturing output declining. -4.1% drop

[Imploding Turtle]

A very good way of keeping investment (and attracting new investment) is to have low corporation tax. We might have to reduce it to 15% if UK car manufacturers are having doubts about future investment.

Exactly the opposite of what the labour party are intending to do ?!?

And how will that tax cut be paid for? Whose taxes will be going up?

[Sidney1st]

Up on 2009 figures when we produced 1 million cars and vans.

We aren't even in the top 10 most years for car production, I didn't realise that.

[nil_desperandum]

Up on 2009 figures when we produced 1 million cars and vans.
.

I think i'm right in saying that 2009 was the year after the events of 2008,so there just might be a correlation there.

[Sidney1st]

Production figures go up and down, it happens.

Some people just get a hard on because they want to blame Brexit.

As stated we aren't even in the top 10 of countries who manufacturer vehicles.

It isn't ideal to have a drop, but don't forget there are changes in demands for certain cars.
There will be a drop in diesels now everyone has twigged Labour were lying or giving out wrong information, about how efficient/clean Diesels were.
Hybrid models are starting to be rolled out so some people may be waiting before upgrading/changing their cars.

Many variables, some of which will be Brexit, others will be similar to what I've mentioned.

[UpTheBeehole]

That's your answer for everything, 'it happens'

It's happening in this case because of Brexit.

Domestic demand fell 14% in a year. British people now cannot commit to buying a new car, because of Brexit. They don't know if their employer will pull the plug in the next few years. Thy don't know if they will be able to afford to eat tariffed food. They don't know how much their mortgage payments will go up by with the inflation currently happening. They can't afford to go on holiday because of the terrible exchange rate on the desperate pound.

To coin a phrase

Wake up Sheeple.