Potentially good news, but with caveats

[BeElBeeBub]

If you were in my job, you'd know what they have done.

That's the point, I'm not in your job, you are.



That's why I asked for clarification.

[johnofgwent]

I thought brexit, in particular the hard type we seem to be heading for, was what we needed to revive manufacturing in the UK? Weren't all the manufacturers that the EU had lured away from the UK set to come flooding back?  Why, now we have definitely left and look like we are heading for the fabled WTO brexit are they not now kicking the UK's door in to build factories free from meddling EU bureaucracy?



In that point, I'm also interested in how EU Parliament officials have been able to drive OEMs to "overstock".  How does that work? Does Guy Verhofstadt's aide phone up the purchase department of VW and demand they order 5000 sets of tartan headrests on sale or return?

If you were in my job, you'd know what they have done.

[BeElBeeBub]

....

It has been an interesting couple of years, mostly chaos caused by political indecision and infighting that has left the industry totally fucked. Not least the insanity of overstocking to meet our customer's insane demands driven pretty much entirely by the demands of the european parliament's officials that they create havoc, mayhem and bankruptcy to assist project fear.....

I thought brexit, in particular the hard type we seem to be heading for, was what we needed to revive manufacturing in the UK? Weren't all the manufacturers that the EU had lured away from the UK set to come flooding back?  Why, now we have definitely left and look like we are heading for the fabled WTO brexit are they not now kicking the UK's door in to build factories free from meddling EU bureaucracy?



In that point, I'm also interested in how EU Parliament officials have been able to drive OEMs to "overstock".  How does that work? Does Guy Verhofstadt's aide phone up the purchase department of VW and demand they order 5000 sets of tartan headrests on sale or return?

[patman post]

Interesting to see what PSA does as it's still unclear what the UK government and unions are seeking from Brexit. Here's an extract from a statement issued mid-2019, which the group has note been able to update...



Groupe PSA has today announced its intention to manufacture the next generation Astra in two plants in Europe.  The group has confirmed that the Russelsheim plant will manufacture Astra and that it is planned that the second plant will be Ellesmere Port in the United Kingdom.



The decision on the allocation to the Ellesmere Port plant will be conditional on the final terms of the UK's exit from the European Union and the acceptance of the New Vehicle Agreement, which has been negotiated with the Unite Trade Union.

[johnofgwent]

Several reports (all stemming from the FT) that Nissan intend to "double down" in the UK in the event of no future agreement after 2020.



https://www.cityam.com/nissan-plans-to-increase-uk-market-share-in-brexit-contingency-plan">https://www.cityam.com/nissan-plans-to- ... gency-plan">https://www.cityam.com/nissan-plans-to-increase-uk-market-share-in-brexit-contingency-plan



And



https://www.politicshome.com/news/uk/foreign-affairs/brexit/news/109569/nissan-pull-out-europe-and-concentrate-uk-event-hard">https://www.politicshome.com/news/uk/fo ... event-hard">https://www.politicshome.com/news/uk/foreign-affairs/brexit/news/109569/nissan-pull-out-europe-and-concentrate-uk-event-hard



Them basic outline is that no deal would make Nissan's current European (as in including the UK) setup untenable.



It would close it's European plants (presumably to ship from Japan).



As imported cars would be at a disadvantage in the UK, it would seek to expand its market share in the UK using it's advantage of not being an import.



This would be welcome news for Sunderland and it's wider supply chain and will no doubt siezed upon as a "brexit win".



There are some caveats (and I'm sure I'll get fruit thrown at me for bringing them up).



1. Nissan deny the plan. It is possible they are lying, but Brexiters insist we must believe Honda when they said the Swindon closure was nothing to do with brexit after warning that brexit would threaten Swindon.  So if we should believe Honda at face value, why not Nissan?.



2. The second part of the statement said



"We've modelled every possible ramification of Brexit and the fact remains that our entire business both in the UK and in Europe is not sustainable in the event of WTO tariffs"



This I absolutely believe. I imagine Nissan have a whole drawer full of all manner of possible responses to different  scenarios and what they entail. I would expect nothing less.  They probably also have a scenario where they close Sunderland and increase EU capacity, and one where they close everything and ship from Japan and so on.



The existence of a scenario in planning is very different from "this is what we plan to do". Depending on the various models outcomes the "double down on UK market" plan could have been rejected.



3. Linked to 2. The article mentions that Nissan would (under the "plan") expand its UK market share from 4% to 20%.  Coincidentally this would mean the output at Sunderland would remain unchanged at ~400k, it's just the entire production would be for UK consumption.



So even if this plan is put in place, Sunderland's production wouldn't increase, it would only stay the same.



This makes me think this is not really a plan, but a "scenario". They posed the question "what would we have to do to keep Sunderland open if exports to the EU became untenable" and the answer was "expand our market share to 20%".  That doesn't seem a realistic possibility.  



Nissan could audibly make 3 or 4 different models at Sunderland.  It's a big ask for 4 models to make 20% of UK sales.



Ford is 10% share across all the models (half a dozen at least), BMW and Audi are 7%ish each across all their models.



4. Linked to 3.  This wouldn't be a win for consumers.  The Nissan's would likely cost more as at least some parts would need to be imported and this face tariffs   in addition, as the cost of the competition would be higher because of the tariffs, the price of Nissan's could rise.



Finally our choice would be more constrained. Brazil used to have a large number of "beetles" and India had masses of "Ambassadors", not because they are great cars (charming as they are) but because they were the only viable option given the imported competition was priced out by tariffs.





But I'm sure points 1-4 will be ignored.

First and foremost, Nissan will do whatever is best for Nissan. I was hired as a freelancer to sort out a number of problems Honda experienced following the decision by Head Office to shut down their mainframe at Swindon and move it to Ghent. My contract ended before the move was complete. The month before I started, Honda World HQ had analysed the sales and production figures and predictions and decided they needed to ramp up the workforce at Swindon. Much publicity was courted and much attention was paid to press opportunities for smiling politicians in the foyer of the Swindon office, and paper, radio, tv and internet coverage of this massive investment (in 2012) was rife.Six months later as I drove away from the plant for the last time, two hundred and fifty of those five hundred had been handed their marching orders the day before, and the other two hundred and fifty were to follow the week after. Strangely (no,not strangely at all when you know the culture inside the gates) there was not so much as a peep in the news about the sacking of those they had just taken on.



As I work for a company that makes innards of motor vehicles, I am somewhat closer to the coalface than many.



It has been an interesting couple of years, mostly chaos caused by political indecision and infighting that has left the industry totally fucked. Not least the insanity of overstocking to meet our customer's insane demands driven pretty much entirely by the demands of the european parliament's officials that they create havoc, mayhem and bankruptcy to assist project fear.



The future will be interesting. Not least because my inbox fills daily with job offers.

[BeElBeeBub]

To be scrupulously fair, a good chunk of the loss was due to the shutdowns of a few manufacturers in anticipation of no deal brexit.

[papasmurf]

Potentially bad news:-



https://www.motoringresearch.com/car-news/2019-uk-car-production-decline/">https://www.motoringresearch.com/car-ne ... n-decline/">https://www.motoringresearch.com/car-news/2019-uk-car-production-decline/

[BeElBeeBub]

Several reports (all stemming from the FT) that Nissan intend to "double down" in the UK in the event of no future agreement after 2020.



https://www.cityam.com/nissan-plans-to-increase-uk-market-share-in-brexit-contingency-plan">https://www.cityam.com/nissan-plans-to- ... gency-plan">https://www.cityam.com/nissan-plans-to-increase-uk-market-share-in-brexit-contingency-plan



And



https://www.politicshome.com/news/uk/foreign-affairs/brexit/news/109569/nissan-pull-out-europe-and-concentrate-uk-event-hard">https://www.politicshome.com/news/uk/fo ... event-hard">https://www.politicshome.com/news/uk/foreign-affairs/brexit/news/109569/nissan-pull-out-europe-and-concentrate-uk-event-hard



Them basic outline is that no deal would make Nissan's current European (as in including the UK) setup untenable.



It would close it's European plants (presumably to ship from Japan).



As imported cars would be at a disadvantage in the UK, it would seek to expand its market share in the UK using it's advantage of not being an import.



This would be welcome news for Sunderland and it's wider supply chain and will no doubt siezed upon as a "brexit win".



There are some caveats (and I'm sure I'll get fruit thrown at me for bringing them up).



1. Nissan deny the plan. It is possible they are lying, but Brexiters insist we must believe Honda when they said the Swindon closure was nothing to do with brexit after warning that brexit would threaten Swindon.  So if we should believe Honda at face value, why not Nissan?.



2. The second part of the statement said



"We've modelled every possible ramification of Brexit and the fact remains that our entire business both in the UK and in Europe is not sustainable in the event of WTO tariffs"



This I absolutely believe. I imagine Nissan have a whole drawer full of all manner of possible responses to different  scenarios and what they entail. I would expect nothing less.  They probably also have a scenario where they close Sunderland and increase EU capacity, and one where they close everything and ship from Japan and so on.



The existence of a scenario in planning is very different from "this is what we plan to do". Depending on the various models outcomes the "double down on UK market" plan could have been rejected.



3. Linked to 2. The article mentions that Nissan would (under the "plan") expand its UK market share from 4% to 20%.  Coincidentally this would mean the output at Sunderland would remain unchanged at ~400k, it's just the entire production would be for UK consumption.



So even if this plan is put in place, Sunderland's production wouldn't increase, it would only stay the same.



This makes me think this is not really a plan, but a "scenario". They posed the question "what would we have to do to keep Sunderland open if exports to the EU became untenable" and the answer was "expand our market share to 20%".  That doesn't seem a realistic possibility.  



Nissan could audibly make 3 or 4 different models at Sunderland.  It's a big ask for 4 models to make 20% of UK sales.



Ford is 10% share across all the models (half a dozen at least), BMW and Audi are 7%ish each across all their models.



4. Linked to 3.  This wouldn't be a win for consumers.  The Nissan's would likely cost more as at least some parts would need to be imported and this face tariffs   in addition, as the cost of the competition would be higher because of the tariffs, the price of Nissan's could rise.



Finally our choice would be more constrained. Brazil used to have a large number of "beetles" and India had masses of "Ambassadors", not because they are great cars (charming as they are) but because they were the only viable option given the imported competition was priced out by tariffs.





But I'm sure points 1-4 will be ignored.