Car production was down 9.1% in 2018 due to numerous factors, including Brexit, lack of demand for diesel and strict emissions laws causing delays.
Jaguar Land Rover (JLR) was the hardest hit, with a 15% drop in production, with just under 450,000 cars leaving the factory, down from the 530,000 that left in 2017.
Brexit and the car industry
Brexit has been a cause of uncertainty for British car makers, with them closing plants, slowing down production, or in the case of JLR, suspending it completely for two weeks in their Solihull plant.
Back in July the CEO of JLR, Ralf Speth, said that a no-deal Brexit would be disastrous for car makers as they rely on a “free, frictionless, seamless logistics” system. One part missing from the production line could cost them as much as £60 million a day, he went on to warn, speaking of the implications that Brexit could have on their company.
“We, and our partners in the supply chain face an unpredictable future if the Brexit negotiations do not maintain free and frictionless trade with the EU and unrestricted access to the single market,” Mr Speth said.
“We urgently need greater certainty to continue to invest heavily in the UK and safeguard our suppliers, customers and 40,000 British-based employees.
A bad Brexit deal would cost Jaguar Land Rover more than £1.2bn profit each year. As a result, we would have to drastically adjust our spending profile. We have spent around £50bn in the UK in the past five years, with plans for a further £80bn in the next five.”
Demonisation of diesel
Thanks to the lack of incentive from the government to remove diesel cars, the backlash from consumers against diesel cars has risen drastically, with the market share for diesel shrinking to under a third last year compared with over 40% the previous year.
Industry experts have commented on the U-turn by Nissan to move production of its X-Trail from Sunderland to Japan as not as a marker on Brexit, but instead the heavy regulations on diesel that are being brought in. Michael Gove’s promise to wipe all petrol and diesel cars off the roads by 2040 has further discredited diesel cars.
Labour’s eagerness in the early 2000’s to incentivise diesel has unfortunately had a much larger backlash than anyone could’ve ever anticipated. With the revelation back in 2015 over VW’s dieselgate scandal the industry was thrown into a state of confusion and even now is still working on a plan to recoup losses. The promise of lessening the CO2, higher MPG, less time between fills and reduced exhaust emissions. After the discovery of the damage that NOx had on humans, and the dangerous particulates that were being emitted into the atmosphere, most governments went down the electric car route, promising efficiency and zero emissions. The small incentives they did offer were only accessible by those with more money, and the average Joe who had bought a diesel with the previous incentives couldn’t afford the new electric cars and their charging. Those who can afford an electric car are reaping the benefits, but with the government now reducing grants and lowering incentives, it’s up to the car manufacturers to make affordable, practical and long range EVs.
Toyota has shunned electric, preferring instead to use hydrogen, where they have got it to the point that they have to create mechanisms to slow down the cars as they are too fast for everyday driving. Hydrogen is also cleaner to produce, and the emissions can benefit the environment. The main issue with hydrogen is safe storage, as it is very reactive to the environment.
Some of the reasons for shunning electric in the UK include the strain on the National Grid, which is powered by fossil fuels, and therefore any significant increase in pressure will just burn more fossil fuels and almost negate the effect of introducing electric as the predominant fuel.
Strict emissions laws
In a bid to reduce excess pollution in crowded city centres, local councils have increased the enforcement of city centre driving to the point that it has affected jobs. Industry experts attribute some of the job cuts in JLR, Nissan et al to the strict and tight regulations.
In April, there will be a ULEZ (Ultra Low Emission Zone) in place in central London meaning that any car that doesn’t meet the standards will have to pay £12.50 a day to enter and drive within the limit.
On top of this, some cities are now introducing another charge for every parking space at an office that isn’t an EV space to discourage people from driving to work as the company will have to foot the bill.
It seems that we need to fully appreciate what the car industry provides to our country. It totals 4 percent of the nations total output, totalling £60.5 billion annually. If this trend continues, it will impact the whole country drastically.
What do you think of the production slump? How can the UK rescue the falling production? Let us know below