10 March 2017

The Car Industry Bully Boys - Part One

Aston Martin isn't complaining, so why is Bentley? I know why, do you?

It is a well known fact that the car manufacturing industry influences governments (and vice versa). I read not so long back about the enormous political clout the car manufacturing industry has in one European nation. This same industry doesn't have that sort influence in the UK by any stretch.

Of course we all know that the UK is leaving the EU and from the outset there was political threats and sabre rattling from the political entities within the EU. That seems to have quietened down. It has been replaced by the car industry, notably car manufacturers in the UK. You would think that the biggest noises would come from car importers bringing their products from Europe in to the UK. No, because they have nothing to make threats with, and therefore cannot exert pressure.

Car makers in the UK are less affected than full importers, exporting from a country where the depreciated pound is currently to their advantage. Europe heavily relies on the UK market so a tariff would be massively hurtful to EU car manufacturing and therefore highly unlikely (ie. won't happen).

UK car makers seem to be running a war of words through the media of reduced investment in the UK - and even worse - if a tariff is enforced by the EU. They have something to threaten with and as with bullies, they are using fear to try and get their way.

In one extraordinary example, CEO of Bentley cars (Herr Duerheimer) said unfettered access to Europe is vitally important to the company, suggesting investment in the UK could become an issue. Is he serious? Bentley cars will be built in the UK whatever happens because that is what most customers demand. 80% of sales are outside of Europe anyway, so it's of limited consequence to Bentley. Higher margin vehicles will be less affected as well. It's so ludicrous that the Bentley CEO should suggest what he has.

BMW has come out and said the MINI car doesn't have to be built in the UK. So is BMW going to close a large factory if the EU hold on to their tariff threat? Toyota and Nissan have also suggested issues with investment, none of which I believe.

A final question to be addressed is why aren't European car makers not pressuring the EU over a tariff they have raised and threatened with? There could be several reasons. They will be addressed soon....

Pictures: Netcarshow.

Mclaren is a small but important UK car maker. They seem happy about things

2 comments:

zoldfulu said...

The posts try to imagine a lot into this.

First of all, it is not the EU that proposed to quit the UK Membership. The rattling did certainly not came from the EU side but from irresponsible UK politicians, now in power (to some extent).

Second it is not the EU that came up with a completely unreasonable wishfoul thinking objective (no payment, offending treatment of EU citizens, yet access to common market). I think the EU position was more than reasonable so far, try something similar with Trump :) .

Thirdly, most UK manufacturers are closely linked to EU companies (especially now that GM is moving out, I think they are bracing for hard (brexit) impact). They already expressed warnings before the referendum, that voters did not listen to. Ghosn is a though manager, has never been afraid to tell politicians to their job, whether Japanese PM or French government. Lobby for UK is not the job of Nissan or Honda. UK industry will indeed lobby UK Goverment, as Germans lobby German Government, French theirs etc. But after the lobbying, it is the job of the UK government to negotiate to create the best possible conditions to UK industry. With Brexit I think the only feasable objective can be damage control.

RayCee Smith said...

Hello Zoldfulu, I have just written another article on a similar subject:

http://raycee1234.blogspot.co.nz/2017/03/vested-interest.html

People will have differing opinions and I am certainly not interested in politics but just observing what is going on. The more I know about politics, the less I like it.