06 Jul 2011
News analysis: Major investments from two leading vehicle manufacturers bring cheer and job opportunities to the UK automotive sector
Government plans for the engineering and manufacturing industries to help pull the UK out of the economic doldrums have been given a boost, with major plant investments from two automotive OEMs.
In early June, Nissan sparked celebrations at its Sunderland plant by announcing that the second generation of its Qashqai – already the company's most successful seller – would be designed, engineered and built in the UK.
An investment of £192m by Nissan would see design work in London, engineering input from its technical centre in Bedfordshire and build in Sunderland.
Nissan chief executive Carlos Ghosn was clear on why the UK was picked for the job: "The UK has been a cornerstone of Nissan manufacturing since 1986, with the Sunderland plant setting important benchmarks for quality and efficiency in Europe and around the world. It's the home of the Qashqai, one of Nissan's biggest product successes. And, as Nissan's leadership in sustainable transportation grows, the plant will become one of the pillars of our zero-emission manufacturing."
The company promised further investment of £420m in Sunderland, for manufacture of the Leaf electric vehicle and lithium-ion batteries, over the next couple of years. The move will further protect job security and will also make the UK home to important future skills for the production of low emission vehicles.
The good news didn't stop with Nissan. Just days after its announcement, BMW Group revealed a £500m commitment to building the next generation of MINI vehicles in the UK. Apprentices from the group were among a delegation to 10 Downing Street in recognition of the investment.
"We have started preparing our UK plants for production of the next generation MINI and this investment underlines that the UK will remain the heart of MINI production," says BMW Group chairman Norbert Reithofer. "The MINI brand has made a significant contribution to BMW Group's success in markets around the world and we anticipate that this will grow further in the future."
MINI production jobs will be safeguarded in the brand's Oxford plant, in its Swindon pressings plant and its Hams Hall engine plant.
The investment programmes will benefit more than just the jobs market, however. Nissan has been running its Qashqai line round the clock for more than a year to meet global demand for the model, producing an average of 1,200 cars per day. Each car contains 3,779 parts, 83.6% of which come from UK suppliers.
Meanwhile, BMW Group contributes £1.2bn to the UK economy every year, supporting more than 46,000 jobs in total. Around 80% of MINI products, and 90% of those from sister car brand Rolls-Royce, are exported. These two brands alone account for nearly 1 per cent of all goods exported by UK companies.
Prime Minister David Cameron has been quick to praise the investments. "I have seen first hand the tremendous work at the Nissan Sunderland plant; this is a great day for them, the whole of the North East and for UK manufacturing, too," he says. Business secretary Vince Cable seconded the support, calling Nissan's Sunderland plant "One of the great success stories of British manufacturing".
Both politicians supported BMW as well. "I welcome this major investment by BMW Group in the UK manufacturing," comments Cameron. "The production and export of iconic British cars like the MINI is making a real contribution to the rebalancing of the economy that this government is determined to achieve."
The wider automotive industry may be taking notice. Board directors of the European Automobile Manufacturers Association, ACEA, have met with Cameron and held their annual conference in London for the first time.
The ACEA represents some of the world's biggest automotive manufacturers at a European level, including Fiat, Volvo, Renault, Jaguar Land Rover, Ford and Toyota.
"I am delighted that so many automobile manufacturers are actually bringing production and supply chain back to the UK," says the Prime Minister. "We are putting money into advanced manufacturing technology and innovation centres and expanding the number of apprenticeships. We really want to see the automotive industry flourish and we are determined to do the things to help it really succeed."
BMW Group Plant Oxford
Nissan Motor Manufacturing (UK) Ltd
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