Good News for Britain

The British car industry's good news today

Steve Cropley

You canot blame people who believe Britain needs a thriving motor industry for feeling a bit paranoid from time to time.

Fifty years ago our car business was the worlds biggest outside America, but through complacency and incompetence we chucked it away.The damage started in the 60s, accelerated through the 70s and 80s, and Ford capped things in 2000 by ceasing car manufacture here after 87 years.By then, luckily, a team of foreign-based companies had moved in. The Japanese embraced the UK as a volume manufacturing site, then BMW, Volkswagen and Tata acquired our leading prestige marques and made them work. Today our industry makes 1.2 million vehicles plus two million engines a year, exports three-quarters of them, employs 770,000 people and feeds £8.5 billion into the economy.

So why the paranoia? Because pessimists remember the past and imagine it could happen again. The leaders of foreign conglomerates who built our modern car industry might decide to dismantle it, especially if the UK government, historically ham-fisted at encouraging industry, were to botch things all over again. Except that its not going to happen. Not if you believe the signs, speeches, smiles and smoke-signals produced earlier in the week in London when the car industrys biggest men came to town for a meeting, the first British-based gathering of ACEA, the European car manufacturers’ talking shop.

They talked and ate for two days. David Cameron, at his most convivial, entertained them in Downing Street. Two of the biggest players shocked the doomsayers by seizing the moment to announce big, new investments in existing UK operations. It was the closest thing weve seen to an automotive love-in. First through the door of Number 10, a day ahead of the horde, was Nissan-Renault chief Carlos Ghosn who announced a 192 million investment in its model. Nissan Sunderland plant  claimed both the UKs biggest and Europes most efficient  which would ensure that the next generation of the British-designed Qashqai SUV would definitely be made here, protecting 5000 jobs. The plant would, claimed Ghosn, become one of the pillars of Nissans zero-emissions manufacturing policy. The politicians purred. After the top secret pow-wow at the Mayfair headquarters of Britains Society of Motor Manufacturers & Traders, ACEA president and Daimler chief Dieter Zetsche summarised proceedings at a press conference, fretting somewhat as the rest of his time-poor fellow chief execs were buckling themselves back into their jets to fly home.

All the burning subjects were discussed, Zetsche explained: the need to maintain Europes competitiveness (and protect 12 million jobs), the importance of maintaining free trade, the need for governments to target support more towards automotive companies (only two per cent of £10 billion-odd goes to the motor sector).He also cited a burning need to curb legislation (there are already 20,000 pages across Europe) and make it smarter. On electric cars, the overriding need was to consider the TCO (total cost of ownership) a key component of future models. Car makers would need to be sensible on matters of mutual concern such as the standardisation of charging hardware for electric vehicles. We have standardised the plug, he said, but the power companies have not standardised the socket. The key component seemed to be good news. We are convinced Europe can remain the technology leader, said Zetsche, a man not given to overstatement. He reserved warm words for the UK government and Prime Mininster Cameron who had impressed everyone, he said, by knowing the difference between a plug-in hybrid, a fuel cell car and a pure British officials had convinced them that manufacturing had moved a long way up the governments priority list, and also that the UK would continue as a model of fair-mindedness when it came to resisting trade barriers including in the hard-nut cases like India (where 5000 European cars are annually imported while 250,000 flow out). Then, in a plush Mayfair hotel nearby, BMW chief Norbert Reithofer capped proceedings by announcing a 500 million expansion of the Mini plant at Oxford to finance the building of the third generation of models. This would encompass the present seven versions already announced , and BMW could imagine three more.The BMW chief revealed that BMWs new flexible manufacturing system, due to start in 2013, and its new front-drive UKL1 platform, to be shared by BMW and Mini, would in theory allow BMWs to be made at Oxford and Minis to be made in Germany  but insisted (against a sustained barrage of questioning from hacks who just dont believe good news) that Oxford would remain the heart of Mini and that the brand only truly worked because BMW respected its heritage. It was such a positive couple of days that it seemed a particular shame the Archbishop of Canterbury should have knocked it off front pages with some strident criticism of the government. But nothing changes the fact that the good effects of this few days will be felt in British car-building circles for years.