Someone on Twitter recently tweeted an article from a German magazine called Automobil Produktion. Sadly, my German is limited to ordering a beer and asking the taxi driver to take me to the Flughafen, but even I could work out what the mag was about.
Its latest issue was of interest because of an article on Brexit and the UK car industry, which I then Google translated. The headline pretty much said it all: “The bad news doesn’t stop: Six years after the Brexit referendum, the British automotive industry is on the rocks – and the forecasts for the English Patients give little reason for optimism.”
The English Patient was, of course, the name despairing bosses at BMW gave to Rover when they took it over, discovering just how badly run it was and how much money they were wasting trying to cure it of its many ills. Now it seems the whole car industry in the UK is being tarred with the same brush.
Car production has shrunk rapidly in Britain. We are down to around 775,000 cars made per year, the lowest level since 1956. This matters, because once you get below a certain level of production, the economies of scale don’t work anymore. The supply chain – the dozens and dozens of companies that make a car plant work – will just stop investing in the UK or even basing themselves in the UK. There isn’t enough business to make it worthwhile.
The lack of clarity from the UK government is also making things worse. The motor industry is used to proactive encouragement from governments willing to make huge contributions and offer ever larger incentives to attract them to their shores. I have always thought that one of the main reasons that there is so much spare capacity in the car production market is because it allows the companies to play one country, government and plant off against the others- getting more subsidies and tax breaks as a result.
But the UK government is far from being proactive. It is actually making things more difficult for car makers in the UK and that’s before new checks on imports have been introduced. Every bit of red tape, every delay, every spare part that has to be stored on-site to allow for delays is an added cost for car production in the UK, that its continental rivals do not have to bear.
That makes new investment ever harder to justify, without investment in new models, new plants and new technology the British car industry will wither and eventually be reduced to a niche manufacturer of luxury cars.
Far from the German car industry coming to our rescue and insisting on a good Brexit deal for the UK (yes David Davis, we remember that), it is looking down on us with derision, scorn and pity while sensing the chance to benefit from our industrial decline.
This was inevitable after Brexit – some Brexiteers even predicted the end of virtually all manufacturing in the UK after we left the EU and thought it a price worth paying.
Funnily enough, they didn’t put that on the side of the bus, but the UK is now paying that price and will continue to do so for years to come.
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