Britain’s car industry disappears

Britain hasn’t even left Europe yet and its manufacturing sector has imploded at the fastest rate in seven years, according to the latest research, with the car industry leading the way.

Car manufacturing fell in Britain in July for the 14th consecutive month in its worst fall in 18 years, and Honda has already closed its British plant at the cost of 7000 jobs.

The manufacturing home of brands like MINI, Land Rover, Range Rover, Jaguar, Rolls-Royce, Bentley, McLaren, Vauxhall, Ford and Aston Martin, the United Kingdom will leave the European Union on October 31. As it stands at the moment, it would leave without a trade deal in place with its largest market.

The other hinge factor for the car industry in Britain is that its biggest volume brands are owned elsewhere, including Toyota, Nissan and MINI.

Car production fell 10.6 per cent to July compared to 2018 and its 14 consecutive months of contraction cracked a record of 13 months set at the height of the global financial crisis in 2008 and 2009.

The UK built just 108,239 cars in July, and its 774,760 cars across the first seven months of the year was a drop of nearly 20 per cent.

The IHS Markit/CIPS UK Manufacturing Purchasing Managers Index (yeah, let’s call that PMI) fell from 48 in June to 47.4 in July – below the arbitrary 50 line that divides growth from contraction.

With the British government insisting on leaving the EU with or without a trade deal, Britain’s economy is on the verge of stalling into a recession, and car-makers have mostly hedged their bets by building redundant plants in continental Europe.

Most are wary of production costs and delays with threats of a 10 per cent tariff, customs searches and other holdups at border controls.

MINI can comfortably switch its production to Germany, because it shares its architecture and most of its components with the BMW 1 Series.

Bentley shares is architecture and oily bits with its Volkswagen Group cousins, Ford’s major manufacturing HQ in Europe is in Germany and Vauxhall (Britain’s version of Opel) is owned by France’s PSA and will simply be abandoned.

Jaguar Land Rover has hedged on production with a plant in Slovakia and farmed-out production at Austria’s Magna, while Rolls-Royce shares a lot of its parts with BMW’s 7 Series.

The only ones without room to move are McLaren and Aston Martin.