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The absence of a major ‘national champion’ vehicle manufacturing group in Britain marks Britain out from certain other major carmaking nations in Europe. The UK industry is relatively fragmented and international in character, a trend that accelerated with the major Japanese investments of the 1980s and 1990s. But in spite of some continuing concerns over the UK being outside of the eurozone and an eastwards shift in the European centre of gravity, the UK auto industry continues to do rather well with production hitting new records. Chris Wright reports.
PSA Peugeot Citroen still refuses to commit a new model to its car plant in Ryton, UK, but has guaranteed vehicle production there until 2010.
The future of the Peugeot factory, which builds the successful 206, has been the centre of much speculation. PSA chief executive Jean-Martin Folz said that it was one of several factories, including more modern facilities in France and Slovakia, in the running for the new model – dubbed the 207.
He declined to commit to the future of Ryton which makes around 180,000 206s a year and employs 3,000 people.
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By GlobalDataJean-Marc Nicholle, PSA’s vice president strategy and planning said at the Geneva Motor Show that even if Ryton did not get the 207, it would continue to produce the 206 through to 2010 – and maybe longer.
“We will continue to make the 206,” he said. “It is a very successful car for us and we will continue to sell it in many markets around the world – Ryton will be the lead plant and the 206 will continue to be made there as long as it remains successful and certainly until 2010.”
Despite PSA’s reservations over its British plant, vehicle production in the UK will reach its highest levels for more than twenty years as foreign automakers continue to invest in the country.
Nissan and BMW have followed an announcement last year by Toyota, which has a car plant at Burnaston and an engine factory in Deeside, to invest more than €70 million.
BMW’s said it plans to spend a further €140 million at it’s MINI factory in Oxford through 2007, on a new 15,000 sq m body shop and improvements to the paint shop.
Board production chief Dr Norbert Reithofer said conservatively that this would increase production at Oxford to “around 200,000 vehicles a year”, although it is already running at 190,000.
Insiders said they expected to see capacity rise by at least 20 percent allowing the factory the size, and flexibility, to produce more MINI variants.
The German automaker has already invested nearly €400 million at Oxford since 2000 and the latest will create a further 200 jobs. It follows further investment at its Hams Hall engine plant just north of Birmingham and in its pressings plant at Swindon where last year it ploughed in an additional €55 million.
This is on top of the €85 million BMW Group has spent on a brand new factory for Rolls-Royce Motor Cars at Goodwood in the south of England.
Nissan is to spend €320 million at its Sunderland factory in the North East to build a new crossover vehicle based on the Qashqai concept, unveiled at last year’s Geneva Motor Show.
The UK Government is adding more than €7 million of regional grant aid into the new car project which will safeguard more than 1,000 jobs at the factory and add a further 200.
The Qashqai concept was unveiled at Geneva Motor Show a year ago to much acclaim. The new vehicle based on the concept, codenamed P32L, slated to go into production December 2006, will be the third new model to be launched at the Sunderland plant in 14 months starting with the Micra C+C in September this year and Tone next January.
The new car will “more of a passenger car” than the original concept, according to Satoru Tai, the man in charge of Nissan Design Europe in London where the car was conceived.
“It will keep the original styling concept, the top half of the bodywork will be very much a sporty passenger car while the lower half will have the look of a 4×4,” he added.
To complete a British feel to the P32L, engineering work on the new model is being carried out at Nissan’s European Technical Centre in Bedfordshire.
As well as the Tone, the P32L will join Micra, Micra C+C and the Primera on the Sunderland production lines which currently build around 320,000 vehicles a year and recognised as Europe’s most efficient car factory.
“The announcement is a tremendous vote of confidence in our workforce,” said Colin Dodge, Nissan Europe’s senior vice president for manufacturing. “Production of the P32L is a good decision for the company given our employees’ track record of handling the complexities of manufacturing multiple vehicles.
“It will be a challenge to integrate this all-new model into our product mix, along with our upcoming model changes. But this is the sort of challenge any car plant would welcome and I know the workforce will be looking forward to next year and the start of production.”
Annual production of the new model will be between 105,000 and 130,000 vehicles a year pushing capacity at the Sunderland plant to 400,000 vehicles a year.
Dodge added: “This puts us in a position to become a global leader and along the road on Nissan’s Value-Up strategy to continue what we have been doing and a global sales volume of 4 million units a year, built as close to our markets as possible.”
Nissan’s total investment in its UK plant now stands at €3.17 billion since 1984 while the British government and added a further €258 million.
BMW’s Dr Reithofer said that even his own company had been taken by surprise by the success of MINI.
He said: “Our decision to produce a new MINI was not received well by everyone. There were concerns that we had overestimated the appeal of the brand.
“But as worldwide sales have shown it has proven to be a winner and even exceeded our most optimistic expectations.” BMW produced its 500,000th MINI at Oxford in August last year.
Reithofer said that currency fluctuations between the Euro, the UK Pound and even the US dollar were not considered a particular problem within the company.
“We took a decision that production has to follow the markets. MINI’s largest market is the UK, which is where we produce it. Similarly the largest market for the X5 is the United States – which is where we produce it.”
Further modernisation of the paint shop at Oxford will increase production flexibility at the plant although managing director Anton Heiss would not be drawn on whether this would mean new variants.
BMW did show some MINI-based concepts at last September’s Paris Motor Show. Heiss said: “The improvements will certainly make us flexible enough for what we do now with the hatchback and convertible. Looking into the future it would also make it possible to do something else.”
He added: ”Because of the flexibility of our plant, supported by intelligent logistics and production systems, we can produce highly customized MINIs with different body styles, engines and interior colours, along with a wide range of options and specifications.
“For the future, customer-orientation and flexibility will continue to have the highest priority in MINI production and our latest investments aim to support this objective.
“It will also provide the basis for even more flexible production for the various models of the MINI family.”
