Blog: Labour costs in car manufacturing – just how important are they?
Dave Leggett | 2 May 2012
How do costs compare between a car manufacturing plant in the UK and a plant in Turkey? Earlier this week I got the opportunity to put that question to Tony Walker, Deputy Managing Director, Toyota Motor Manufacturing UK. His answer surprised me. He said that much of the cost of manufacturing is down to parts and logistics. Okay...and labour at the assembly plant? He put that at just 6-8%. I must say I thought it would be a larger proportion than that. Making the C-segment sedan in Turkey for shipment to markets in southern/southeastern Europe therefore makes sense. And Burnaston serves as the manufacturing plant for the higher spec C-segment hatch that mainly sells in northern Europe; no big incentive to go for lower labour costs there on the basis of that kind of percentage.
There's an interesting difference between Toyota and Nissan in their respective UK plant strategies. Nissan uses Sunderland for nichey models like Qashqai and Juke (Leaf from next year). It now brings in the Micra for Europe from India (where, presumably, labour costs and parts costs are significantly lower than in Europe – sufficient to more than compensate for the EU tariff and shipping costs). Toyota on the other hand is using its UK plant for more mainstream cars.
Except that Nissan is now going to make a C-seg hatchback (Invitation-based) for Europe in Sunderland as well...
The US presidential campaigning that seems to go on forever is something that can look a little perplexing at times to overseas observers....
News just in from China suggests a Toyota joint venture there - via a new China-only brand - is readying what might be a decent five door hatchback rival for Nissan's well-entrenched Leaf EV....
Following the appearance of those infamous S90 pics a couple of months back, now it's the turn of the V90 to hit the web - as a model car....
- ANALYSIS: VW's self-defeating defeat devices
- CEO says Citroen wants to be quirky again
- Volvo's engine and platform independence progress
- Advanced tech previews from OEMs - PLDB
- Indian summer for SsangYong - ANALYSIS
- Jaguar Land Rover expands engine plant capacity
- VW Group reins in capital spending
- Takata manipulated test results back to 2000
- Bosch investigated for role in VW scandal
- Prosecutors eye VW workers for emissions tax evade
- Global light vehicle instrumentation and cockpits market- forecasts to 2030
- Global light vehicle OE shock absorbers market- forecasts to 2030
- Global light vehicle electronic braking market- forecasts to 2030
- Global light vehicle OE mirrors market- forecasts to 2030
- Global light vehicle roof systems market- forecasts to 2030