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Japanese Car Production in UK unlikely after Brexit

All this talk of Brexit and nothing has been resolved.  This week the EU decided to extend implementation until October 31, 2019.  The world’s waiting anxiously to see what the Brexit deal will mean for both Britain and the European Union.  There’s so much uncertainty on how Britain will conduct business in Europe after Brexit.  Either way the automotive car makers are getting nervous and have already made changes that are effecting their car production in Britain.

In February, Nissan announced it had decided to cancel their plan to expand the Sunderland manufacturing plant which turns out 520,000 cars a year and employs 7700 people in Northern England.  The proposed expansion was to produce Nissan SUVs, Qashqai and X-Trail and would have increased the two assembly line plant to three, employed an additional 3300 jobs people and injected the local economy with an estimated £254m in wages. 

Then, in mid March Nissan made a second announcement stating the same facility would stop making Infiniti Q30 and Q30X models later this year due to poor sales in Europe.   These are big losses for an area that is slow to recover from various industry shutdowns including coal mining, glass manufacturing and ship building.

The biggest concern for Nissan is parts availability.  Due to the high cost of storage at or near their Sunderland site, their facility is dependent on receiving 5,000 parts daily from their EU partners.  After Brexit those parts are likely to be hung up in red tape crossing the Channel leading to production delays.  

Another Japanese car manufacturer, Honda said in February by 2021 they will close their car plant in Swindon (Southwest England) that employs 3500 people and makes about 147,000 Civics per year.  Honda claims they will focus on their electric car manufacturing but a recent deal struck between Honda and the EU suggests the elimination of tariffs on cars imported after 2027. 

There’s been no official word from Toyota who has operated a car manufacturing plant in Burnaston, Derbyshire since 1992 and currently produces about 150,000 Corolla’s per year there.  However they have reduced their production by 50% due to heavy dependency on components imported from the European Union.

BMW and Ford are also concerned about Brexit.  The plant making Minis in the UK plans to close for at least a month following the implementation of Brexit.  Ford which employs 13,000 workers has said a bad exit could cost them £800m. 

Many transnational companies are concerned about what Brexit will mean for them.  It is apparent the car companies in the UK are making changes ahead of Brexit to avoid production delays and complicated import and export rules once it’s implemented.  The only thing clear about Brexit is that no one knows exactly what will happen or when it will happen, only that it will be different. 

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