The UK is becoming “more challenging” as an automotive manufacturing base as the industry shrinks and becomes less attractive to suppliers, according to the country’s largest car manufacturer, Nissan.
The UK produced 775,014 cars in 2022, down 9.8% on 2021 and 41% down on pre-pandemic 2019, when more than 1.3 million cars were built, according to figures from the Society of Motor Manufacturers and Traders.
“The UK is becoming more and more challenging as a manufacturing footprint,” Nissan chief operating officer Ashwani Gupta told journalists at a London event on Monday.
According to Gupta, the UK’s shrinking car output is making it harder to source locally.
“We are not attracting suppliers,” he said. “If you don’t have a big automotive industry, what is the benefit for suppliers to localise raw materials and so on.”
Typically, automotive suppliers locate near a big manufacturing centre to cut down on logistics cost and complexity, but often need secondary customers to achieve economies of scale. The issue is particularly problematic when it comes to batteries, for which raw materials are typically sourced and refined outside the country. “Just making a plastic box is not industrialisation for me,” said Gupta.
Nissan will source batteries for its new small electric SUV slated to replace the Leaf EV at Sunderland from supplier Envision AESC, which is expanding its current cell-making facility next to the Nissan plant.
Sourcing parts and materials locally is also key to achieving high enough local content for export countries to count the car as “UK-built”. If too much of the car’s content is imported, the car might be judged as not being British enough for countries with which the UK strikes free trade agreements, which typically require minimum levels of local content.
Last year Nissan built 238,329 Qashqais, Jukes and Leafs at Sunderland (up 16% on the year before), overtaking Jaguar Land Rover but still half the level of its record of more than 500,000, according to SMMT figures.
Gupta said Nissan could build a version of the forthcoming small EV at Sunderland for Alliance partner Mitsubishi, but no agreement has been struck. “If Sunderland is competitive, we can build Mitsubishi-branded models,” said Gupta.
Mitsubishi has said it needs access to Alliance-built EVs it wants to continue selling in Europe, but hasn’t specified where. “If Mitsubishi wants the EV out of Sunderland, they can have it, but we are not going to force them,” added Gupta.
Mitsubishi will start selling a rebranded Renault Captur in spring, followed by a rebadged Clio called the Colt later in the year.
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