Blog: Dave LeggettLabour 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...

UK: Toyota's UK manufacturing base 'in revival phase'


BLOG

Colossal China powers on

I'm starting to get a small idea of the scale of things here in China, but really, I'm only scratching the surface of this vast country....

BLOG

China Hot Pot

Given the startling complexity of obtaining a journalist visa for China - the code 'J2' is now indelibly stamped on my mind - it was with some surprise how swiftly I managed to sail through airport im...

just-auto homepage



Forgot your password?