British Auto Industry Risks Slow Decline After Brexit

“Therein lies a flashing yellow light,” Mr. Palmer said. “If they’re not tooling up the next-generation E.V. in Sunderland, and everything is going electric, that’s a concern.”

Britain was once one of the world’s leading auto producers, its glamour epitomized by Rolls-Royce, Bentley and James Bond’s weaponized Aston Martin. But auto production peaked in 1972 and has been pretty much downhill since. Brands like Rover, Austin-Healey or Sunbeam, widely admired but only intermittently profitable, disappeared. MG, once known for two-seat sports cars, belongs to SAIC, a Chinese automaker that uses the brand name for a line of S.U.V.s.

Almost all the surviving British car factories are owned by foreign companies with global footprints, capable of moving production to where it is most efficient. Toyota, which builds Corollas in Derbyshire and employs 3,000 people, is another example.

Being able to export is crucial; 80 percent of the cars produced in Britain are sold abroad.

Brexit was another setback to British auto output. Four years of uncertainty about the terms of Britain’s divorce from the European Union, amid a global slump in car sales, discouraged automakers from modernizing their British factories or retooling for next generation models.

British car production fell 14 percent in 2019 from the previous year, a bigger plunge than any other major auto-producing country except Iran. Britain ended the year in 16th place among automaking nations after the Czech Republic, producing 1.4 million cars and light trucks, according to the International Organization of Motor Vehicle Manufacturers. And that was before the pandemic caused car sales to plummet worldwide.

The country’s auto output will drop further in July when Honda closes a factory in Swindon that produces Civics, the Japanese company’s only automobile plant in Europe. Honda’s poor sales in Europe were the main cause for the shutdown, which will put 3,500 people out of work, but Brexit probably played a role, analysts say.

Suppliers are also closing operations. ZF, a German company that is one of the world’s largest auto parts makers, said last year that it would shut down a factory in Sunderland that employs about 100 people making components for steering systems.

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