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Thursday, 21 March, 2002, 12:08 GMT
What's left of the UK car industry
The UK car industry is said to be in trouble.

Ford has stopped making cars at Dagenham, Vauxhall has closed its Luton car plant, and industrial relations at MG Rover's Longbridge factory are tense.
The industry's slow decline from its 1960s heyday has in recent years been accelerated by a fall in export demand owing to the euro's weakness against the pound.

But reports of the industry's demise are exaggerated.

UK car output may have fallen by about 9% last year compared with 2000, but no fewer than 1.5 million still rolled off the production lines.

Ford

The world's second largest automotive company has stopped producing Ford cars in Britain, but instead, the UK is becoming one of Ford's centres for engine production.

At Bridgend, just under 1,400 workers make the engines for a wide range of Ford cars. In February last year, Ford released details of a 240m investment in its south Wales plant to build a new generation of Jaguar V6 engines. This investment is expected to lead to another 500 new jobs.

Dagenham, meanwhile, is set to become the "global centre" for diesel engines. The operation in east London employed 1,600 people before the car production was halted.

Ford says it wants to add 500 jobs over the coming years, although internal company documents obtained by the BBC last year suggested that some of these are actually just transfers from other parts of Ford UK.

At Enfield 1,000 employees work in a research and development centre, while in Southampton 2,100 people produce the Ford Transit van.

Jaguar, Aston Martin, Land Rover(Ford)

But then, Ford is still producing passenger cars in the UK, albeit in the disguise of its "premium" brands.

Jaguar, with plants at Coventry and Birmingham is the big success story of UK motor manufacturing, posting four successive years of strong sales. In 2001, the company sold more than 100,000 cars for the first time ever.

The new 'baby' Jaguar - the X400 - is being produced in Ford's Halewood factory, which churned out Escorts until September last year.

As a luxury car maker, price competition is not high on Jaguar's agenda, making it easier for the car maker to cope with the euro's weakness against the pound.

Another premium brand in the Ford stable is Aston Martin, a true niche car maker which will move production to the Land Rover headquarters where the "premium" brands' R&D will be concentrated..

Ford now also owns Land Rover, which it bought from BMW after the break-up of the Rover group.

Honda

Honda's Swindon plant is one of the Japanese car factories geared up to export to Europe. Over three thousand employees build Accord and Civic cars, and last year Honda announced a 130m investment for a production facility to make CR-V four-wheel drive cars.

The strength of the pound has hit Honda hard, and there have been mutterings that new investment could go to the continent.

Nissan

Production facilities at Nissan's Sunderland factory are state-of-the-art, and the 5,000 workers there are famous for being Europe's most productive car builders, assembling more than 330,000 cars a year.

Nonetheless, the plant's management has been complaining for a long time. Most of the cars - Micra, Primera, Almera - are built for export, and the high pound is cutting into profit margins.

After months of wrangling, and with the help of a 40m government grant, Sunderland finally won the contract to build the next Micra.

However, the factory is attempting to cut costs by 30%, and many of its UK suppliers are under pressure. Nissan has said it wants to switch to suppliers in the eurozone, where car parts are cheaper.

Peugeot

The French company's Coventry factory produces the Peugeot 206 model and employs 3,500 people.

The plant is profitable, earning its parent 104m during the past year. One reason for this is its high productivity. Peugeot claims that its Coventry operation is Europe's only car factory churning out cars 24 hours a day, seven days a week.

Plans to build the estate version of the popular 206 here will create seven hundred temporary jobs at Ryton and the summer shutdown will be abolished.

Rover

Rover Cars was broken up in 2000, after former owner BMW failed to turn around the loss-making company.

Longbridge, with about 8,500 workers, has now been acquired by the Phoenix Consortium. It produces the Rover 25, 45, 75 as well as the MG-F.

At Swindon, 3,000 workers produce the body parts for all Rover cars.

The recently modernised Cowley plant at Oxford stayed with BMW and employs 3,500 people. It used to produce the Rover 75, but now makes the new Mini from 2001.

Toyota

Toyota has two factories in the UK, Burnaston, where 2,800 workers build the Avensis and Corolla, and Deeside in Flintshire, where 300 staff make car engines.

Both factories have in the past been forced to operate at less than full capacity, blaming the impact of the strong pound.

Toyota last year said it would hire an extra 300 workers and increase production by 30%, in an attempt to make better use of idle production facilities. It aims to increase UK production of the Corolla model from the current level of 170,000 cars to 220,000 vehicles a year.

Vauxhall (General Motors)

Superficially, Vauxhall appears to be in a similar situation as Ford - owned by a big US firm with operations spread across Europe, especially Germany.

Vauxhall, however, does not like such comparisons. General Motors is investing heavily in its UK plant at Ellesmere Port (Astra, V6 engines and soon the Frontera).

In February 2001, it confirmed plans to build the new Vectra model in Ellesmere Port, securing 1,200 jobs. The firm wanted 5m in government grants to ensure that the work went to the English plant, rather than its sister factory in Antwerp, Belgium.

But the Luton plant where the old Vectra was built ceased producing the cars in March, with the loss of 1,900 jobs.

Vauxhall/GM employs more than 11,000 people in its plants, and its investment is making production lines more flexible and therefore competitive.

Nonetheless, Vauxhall acknowledges that the strong pound forces it "to work extra hard" to stay ahead of its rivals - both within and outside the GM empire.

Niche producers

And then there are Britain's niche car makers, famous names that produce limited numbers of sports and luxury cars.

The most high-profile of these, Rolls-Royce, now belongs to BMW, which bought the rights to the prestigious marque in 1998. It is due to take over production of Rolls Royce cars in 2003.

Volkswagen, which lost the Rolls Royce marque to its German rival after a bitter takeover battle, holds the rights to Rolls Royce's sister brand, the Bentley.

TVR, Lotus and Lola are famous for their innovative sports and racing cars.

One of the most quirky firms is probably Morgan Motor Cars, with its Aero 8 roadster, built by hand with an aluminium body mounted on an ash frame.

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12 May 00 | Business
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