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From the chair: July 2019
publication date: Jul 1, 2019
author/source: Kieron Fennelly
As we pass mid 2019, the car manufacturing scene in Europe presents mixed messages.
Ford announced the closure of its Bridgend plant, grim news, but not entirely unexpected. The contract to make petrol engines for JLR is running out and on the continent other Ford factories are making the same engine range as Bridgend.
Vauxhall on the other hand seems to be flourishing under its new owners: so far PSA’s rationalisation strategy has concentrated on the Opel plants in Germany. Expect an announcement about Vauxhall Ellesmere Port plant in a few months.
While the German premium brands have mostly seen their sales falter in a China where slower growth has been compounded by US trade tariffs, none, not even VW has been caught out as badly as JLR. Nevertheless Ferdinand Piëch warned VW as long ago as 2012 about its over-reliance on China and weakness in the US: after the dieselgate débâcle in 2015, Wolfsburg is making a second attempt to re-establish itself in North American, this time through a partnership with Ford on autonomous vehicle technology.
Renault’s attempt to merge with Fiat Chrysler and create an essentially European group to rival VW and Toyota, has foundered: Renault has never recovered from the Carlos Ghosn affair: in hindsight and whatever Ghosn’s alleged misdemeanors, it does now seem that the Nissan board has used the affair to loosen its ties with Renault.
Ambiguities about the relationship with Japanese and the fact that the French government still holds a share in Renault (now 15%) were enough for FCA’s spokesman to say that merger discussions were off. It leaves Renault which has invested heavily in electric cars for which the market is proving slow to develop, looking vulnerable.
In a Britain where normal government decision-making remains suspended because of Brexit uncertainty (is anyone questioning the rate at which HS2 is burning money without a yard of rail having yet been laid?) this offers little consolation.
Mike Hawes of the SMMT, tried to put things in perspective at SMMT’s recent Test Day: despite continued uncertainty, 2018 was, he said, still the third best year for UK car manufacture since the 2008/9 recession. The industry is worth 860,000 jobs and generates £82bn, but the SMMT’s June figures now suggest that 2019 output will fall below 2018’s.