Europe’s manufacturers are hit by another drop in demand as struggling consumers cut back, underlining the scale of the region’s economic woes
Parking charges exemption and removing yellow and red line restrictions will improve take-up, thinktank says
Electric car owners should be allowed to park on yellow and red lines, and park for free, a leading thinktank said on Thursday.
On one of the busiest days of the year for road traffic as people take to their cars for Easter breaks, the Institute for Public Policy Research (IPPR) said that a ‘green badge’ akin to the blue badge scheme for disable drivers should be introduced to drive take-up of electric vehicles, seen as a key way to cut carbon emissions. Owners of such a badge would be exempt from charges in car parks and permit areas, and allowed to drive for free through congestion charging zones such as London’s and Durham’s and across toll roads such as the M6 toll or Severn bridge.
But the idea was immediately attacked by motoring organisation AA, which suggested the plans could in fact increase greenhouse gas emissions rather than reduce them.
An AA spokesman said: “Allowing them [electric car owners] to park on double yellow lines, which are there mainly to ensure good traffic flow, you may create problems. The disturbing irony is that these low emission vehicles could create more congestion, which would increase emissions from other vehicles and be a bit of an own goal.”
He warned that if electric cars became much more popular, a “saturation point” could be reached. However, he said that cheaper parking charges for such cars would be a good idea to encourage take-up.
Electric car sales increased rapidly in 2012 in part due to the £5,000 government grant launched in 2011, outstripping growth in the wider car industry. But the number registered under a grant scheme last year – about 2,000 – was just a fraction of the 1.9m conventional cars sold in 2012.
The IPPR also suggests fining owners of combustion engine-powered cars parked in front of electric charging points, and that parking charges should go up for normal cars to offset loss revenue for local authorities giving exemptions to electric cars. It even suggests electric cars should potentially be allowed into bus lanes, an idea which has been trialled in Oslo, Norway.
The proposals are contained in an IPPR report due soon on the UK’s automotive industry, whose authors say “the UK is already lagging behind other countries” on electric car ownership because they are perceived to be too expensive and people do not know enough about them. The thinktank also calls for keeping the £5,000 ‘plug-in car grant’, which is due to expire in 2015.
Will Straw, IPPR’s associate director, said: “Although early days, Britain is currently behind other European countries and the US in terms of the take up of electric cars and other ultra low emission vehicles. A ‘green badge’ scheme would help increase demand, giving a much needed boost to the industry and supporting other government policies like the ‘plug in’ grant.
“While we want to encourage innovation from local authorities, they need to act together to make sure their policy is uniform across neighbouring areas. This will provide clarity for drivers about the privileges that they are entitled to as they travel around.”
The luxury carmaker plans to increase investment and raise employment at the site to about 1,400
Jaguar Land Rover is to create an extra 700 jobs by doubling the size of its engine factory in Wolverhampton.
The luxury carmaker plans to increase investment at its UK engine plant and raise employment at the site to about 1,400, the chief executive, Ralf Speth, said .
He told a press conference that the firm planned to increase investment at the plant to more than £500m.
Jaguar Land Rover (JLR), owned by India’s Tata Motors, has ridden a rise in demand for its luxury saloons and SUVs over the past two years, notably in China and other emerging markets, bucking the trend of plant shutdowns and falling production at many European carmakers.
The investment is part of a surge in capital spending in JLR’s production facilities.
In China, for example, the company and local partner Chery Automobile are building a factory.
Company sources also told Reuters on Saturday that JLR was investigating the potential of manufacturing cars in India.
Despite its plans overseas, JLR has continually stressed its dedication to its plants in Britain, where it says it is the country’s largest automotive investor in research and development.
There’s one easy way to save petrol – turn your engine off. And if you don’t, this Volkswagen will do it for you
The grumpy driver of the school bus looked surprised when I tapped on his window. I was a bit surprised myself, actually. But I was annoyed. “Your engine has been idling for 45 minutes,” I said. “The whole time I’ve been swimming you’ve been parked here, going nowhere.” There was a silence while he gathered his thoughts, his sandwich hovering mid-air. “It’s a
Largest settlement in US history involving car defects must now be approved by a judge
The Toyota car company has agreed to pay over $1bn to settle claims that its cars could unintentionally accelerate out of control. A judge must approve Toyota’s offer of $1.1bn (£683m) which was filed in a Californian court on Wednesday.
Toyota was taken to court by owners of its cars who claimed there was an electronic fault in the acceleration system. Toyota said any accelerator problems were caused by driver error, pedals sticking or badly fitted mats. The settlement means Toyota does not admit blame and avoids a lengthy trial.
The deal includes payments to customers as well as installation of a brake override system which prevents unintentional acceleration in about 3.25m vehicles. The terms include a $250m fund for former Toyota owners who sold vehicles at reduced prices because of adverse publicity, and a separate $250m fund for owners not eligible for the brake override system. Lawyers will receive $200m in fees and $27m in costs.
Steve Berman, representing the car owners, said the settlement is the largest in American history involving car defects.
Toyota has recalled more than 14m vehicles worldwide due to acceleration problems in several models and brake defects with the Prius hybrid.
Japanese carmaker says Infiniti model to be built in Sunderland, with £250m investment helping create 720 supply chain jobs
Nissan is adding a further 280 manufacturing jobs at Britain’s largest car plant in Sunderland.
The Nissan factory in north-east England has a symbolic role in Britain’s recent industrial history after being widely credited with launching a revival of car-making when it opened in the mid-1980s.
The Japanese automotive group has confirmed that the global model of its Infiniti brand will be built in Sunderland creating the jobs at a plant that employs about 6,000 people.
Nissan expected the £250m investment to create a further 720 jobs in the UK supply chain, raising the new jobs total to 1,000. It also confirmed that the plant, which makes the Qashqai, Juke and Note models, will this year become the first in the UK to make 500,000 cars in a calendar year.
The announcement is in effect a swap for the construction of Nissan’s new compact car, announced in March. That task is going to a plant outside the UK.
Vince Cable, the business secretary, said the move was a “strong endorsement” of Britain’s car industry.
Referring to government support for the industry that includes a new tax credit for research and development and a £341m investment in automotive companies from the government’s Regional Growth Fund, he added: “The auto sector is living up to being one of the great success stories of our industrial strategy and a testimony to government and private sector working together in close partnership.”
Colin Dodge, Nissan’s chief performance officer, said: “This milestone, our first premium product to be manufactured at Sunderland, reconfirms our commitment to UK manufacturing and the ongoing success of the plant.”
David Cameron said: “This investment is excellent news for the north-east and another vote of confidence for UK manufacturing. The continued success of Nissan in the UK demonstrates the strength of the car industry here, and its importance as we rebalance and grow the economy.
“This announcement shows how the car industry in partnership with the government continues to win important long term investment projects in a tough competitive sector, helping the UK to get ahead in the global race.”
Car firm to start manufacturing vehicles in world’s largest automotive market from 2014 after agreeing £1.1bn joint venture
Jaguar Land Rover has signalled the importance of China to its growth prospects by starting the construction of a factory outside Shanghai.
JLR and its Chinese partner, Chery, formally laid the foundation stone for a plant in Changshu, near Shanghai, as part of a 10.9bn yuan (£1.1bn) investment that will include a new research centre and an engine production facility. The firm’s owners, Tata, also own a JLR assembly plant in India but the Chinese venture is the company’s first full-blown sortie into overseas manufacturing, reflecting stellar growth in the car firm’s third largest market.
The business posted a 58% increase in Chinese sales in the second quarter, boosted by demand for the recently launched Range Rover Evoque model.
As well as producing existing JLR models, when the plant opens in 2014 it will produce vehicles specifically tailored for the Chinese market, now the world’s largest automotive market.
In a joint statement, JLR and Chery said: “Together, we will now begin working in close collaboration on our partnership plans to harness the capabilities of our respective companies, to produce relevant, advanced models for Chinese consumers.”
JLR employs 24,000 people in the UK but its overseas ambitions have caused disquiet at Unite. The union’s former general secretary Tony Woodley has expressed concern that the company’s growth ambitions are tailored for Brazil, India, Russia and China and not the UK.
Speaking in September, JLR chief executive, Ralf Speth, said the firm’s immediate manufacturing ambitions lie outside the UK, saying the firm needs to “go where the markets are”. He said JLR was proud to have added 8,000 manufacturing jobs in the UK in recent years, owing to demand from the US and China.
“Two and a half years ago we discussed closing plants here in the UK and I am happy we did not do so,” said Speth. But he refused to commit himself to further expansion in the UK.
The business secretary is upbeat about the prospects for the sector at the launch of the new Toyota Auris in Derby
Car manufacturers love a glitzy product launch, but the ceremony to welcome a new model at Toyota’s Derby plant last week was modest by industry standards. Nonetheless, the obligatory dry ice, flashing lights and thumping music struck a rare celebratory note during a difficult year for automotive groups.
“I think this is the best product we have ever had,” says Tony Walker, Toyota’s deputy head of UK production, gesturing towards two new Toyota Auris cars that have just received an approving inspection from guest of honour, business secretary Vince Cable.
One of the vehicles is an inadvertent reminder of the industry’s difficulties. It is a left-hand drive model, ready to be exported to a continental market in freefall. While the homegrown likes of Jaguar Land Rover (JLR) are still enjoying massive sales increases, it is the big producers such as the Japanese triumvirate of Toyota, Nissan and Honda – and US-owned Vauxhall – that underpin one of the UK’s most successful export industries.
“We rejoice in the success of the premium carmakers, but the UK has to have volume carmakers or the suppliers cannot survive,” says Walker. “They need the volume to have a business.”
Yet at the moment it’s widely agreed that Europe’s carmakers have too many factories geared to high demand and not enough customers buying what they produce. Fiat boss Sergio Marchionne has called it “carmageddon“. Sales in Europe have fallen for 12 consecutive months, exacerbating the financial strain for automotive groups whose manufacturing operations are tailored to a pre-credit crunch market.
Western European factories churned out just under 16m cars and vans in 2007, but the total this year will be 12.5m, according to analyst IHS Automotive. Against this backdrop, Ford announced the closure of three European sites last month, including a Transit van plant in Southampton and a panel-stamping operation in Dagenham, with the loss of up to 1,400 jobs. Peugeot has announced plans to shut a plant in Paris, while General Motors is expected to close a site in Bochum, Germany.
Toyota’s European operations are not on the critical list, says Walker, because the company took its medicine in 2010, shedding 800 jobs: “We took a lot of our countermeasures earlier. We have already restructured to that low level.”
And, Southampton and Dagenham aside, UK-based car manufacturers are set for a good year. The Vauxhall car plant at Ellesmere Port in north-west England escaped closure after securing work to build the next generation of Astra cars, while JLR has moved to a 24-hour production line in nearby Halewood in order to cope with demand. According to AutoAnalysis, a research company, Britain will produce 1.6m cars this year – an increase of 19% on 2011. Walker, a UK car industry veteran who started his career at Ford in 1977, says the British environment has been transformed. “We have got the main things right, like quality, productivity, flexibility,” he says. “All the issues of bad equipment, bad industrial relations, bad management got swept away. Those who could not modernise closed.”
Car manufacturers are also more responsive to demand, tailoring cars to customers’ needs before construction begins. “That sort of thing was unheard- of. As a country we used to churn them out, stick them in fields and discount them to get rid of them,” Walker says.
But some experts wonder whether the UK can remain immune to the eurozone crisis. About half of all exported, UK-made cars go to the eurozone. David Bailey, a professor at Coventry University business school, says that signs are already emerging of some impact on manufacturing activity: a temporary one-week closure at Ellesmere Port; the looming redundancies at Southampton and Dagenham; the introduction of a four-day week for some staff at Honda’s Swindon plant.
“The state of the European market will catch up with us at some point, as it has already with Ford, Honda and [Ellesmere Port owner] General Motors,” says Bailey. “Given that 45% of UK car exports go to the eurozone, it will have an impact.”
Bailey adds, however, that manufacturers such as JLR have made shrewd moves in targeting developing markets such as China, providing a sales outlet when Europe began to suffer: “What is benefiting the UK is that British producers have looked beyond the eurozone.”
David Raistrick, a manufacturing expert at Deloitte, predicts that British sites will overcome the eurozone crisis, with new workforce deals at Honda and Vauxhall underlining the flexibility of British car workers. “The UK is not a cheap place to build cars,” he says. “It is far cheaper to go and build in a low-wage economy than in the UK, you would think. But you need fewer people to build a car if you have efficient production facilities, so the UK ticks all the right boxes.” He adds: “The industry will go from strength to strength here. The 1.6m [UK production total for 2012] will keep rising because a lot of the world’s biggest carmakers are realising that the UK is a smart place to build cars.”
Cable, who played a role in the negotiations that took the next-generation Astra to Ellesmere Port, believes the long-term future is bright. A Vauxhall owner himself, he reels off the UK investments that have been announced by car manufacturers over the past 12 months, from Ellesmere Port to the Toyota plant in Burnaston, south of Derby.
“All the big car producers have found the UK a good place to do business, with a flexible and co-operative labour force,” he says. Alluding to the French government’s plans to rescue Peugeot with a €7bn state package, he adds: “The government is supporting the industry in the right kind of way, not making open-ended subsidies and investments of the kind that you get in France.” That support includes backing for suppliers, investment in low-carbon vehicles, a new tax credit for research and development and a £341m investment in automotive companies from the government’s Regional Growth Fund.
After the Derby launch, Cable admits that Ford’s closure of the Southampton van plant is “unambiguously bad news”, but welcomed the announcement that its Dagenham site will build a next-generation diesel engine, with associated design work for its technical centre in Basildon and extra investment at the Bridgend investment plant in north Wales. “It was good news in the long term for Ford’s future in the UK,” he says.
Cable acknowledges that the downturn in the eurozone could cause problems for an industry that is one of the foot soldiers in the government’s “march of the makers”, which is seeking to generate more economic growth from export-led manufacturing. “We keep a weather eye on all of these things,” he says. Like Walker, Cable was a ringside witness of the British car industry in its more troubled days, as a special advisor to then industry secretary, the late John Smith, in the 1970s.
Drawing on that period, he says he is unconcerned by the fact that Britain’s car factories are foreign-controlled, from Indian-owned JLR to Volkswagen’s Bentley brand.
“I am most emphatically not nationalistic about ownership,” he says. “We need to cast our minds back to the car industry in the 1970s when we had more indigenous ownership through British Leyland. It was seriously dysfunctional and in danger of becoming a joke.”
Having spent the morning with Toyota executives, Cable brings the argument full circle, describing the establishment of a Nissan plant in Sunderland in 1986 as turning point: “What restored credibility was investment from the Japanese.” Another reason for British manufacturers to look beyond Europe.