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...
Interesting news today that Ford is significantly raising output of the Fiesta in Germany in Q1 (other models, too, but mainly Fiesta). The move prompts a number of thoughts....
While various parties figure out What To Do with the Hoegh Osaka and its valuable cargo of Jaguar Land Rover, Mini, Rolls-Royce and JCB products, here's how things turned out the last time we covered ...
- What now for docked Hoegh Osaka cargo?
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- RESEARCH ANALYSIS: Review of instrumentation
- VEHICLE ANALYSIS: Porsche Cayenne S E-Hybrid
- ASEAN vehicle market down almost 10% in 2014
- JLR recreates 1948 line for Defender plant tour
- Most cars unscathed by Osaka drama: ship owner
- GENEVA DEBUTS: McLaren 675 Longtail
- Ford 2014 operating profit plunges $2.3bn
- "Bumps and dents" for some driveable Hoegh cars
- Global vehicle lightweighting - technology, trends and the future
- Global light vehicle OE wheels market- forecasts to 2029
- Global light vehicle engine technologies market- forecasts to 2029
- Global light vehicle HVAC market- forecasts to 2029
- Global light vehicle safety systems market- forecasts to 2029