“Our target was that by 2020 we would be producing about two million vehicles [per year], but actually we will just do under a million this year,” said Davies.
“We have a business-friendly environment, but it’s all about volume and whether there’s enough demand in the UK for a global supplier to put their forging facility or alloy wheel facility in the UK.”
The lack of a UK electronics supply is a big concern. “As the vehicles get more high-tech and advanced, the likelihood is that UK content will decline further,” said another analyst, who asked to stay anonymous.
If the UK were to declare which of its car makers were more British in terms of content, low-volume luxury brands would probably have the greatest claim.
Bentley reckons that it has the most British content of any car maker, despite its bodies coming from Germany. The sheer number of hours adding value to a sheet of wood to turn it into a polished veneer, for example, all adds to a car’s Britishness.
But that Britishness is mostly valued outside Britain. Last year, 89% of the cars bought in this country were imported – a new record. So if we want our car industry to remain healthy, it’s crucial that we have the best possible trading relationships with our main customers.
Why Britain needs its own car batteries
The UK desperately wants batteries to be included as UK content as part of any trade deal with the EU, and it’s easy to see why. The batteries in hybrid and electric cars form such a huge part of their cost that much of the value of cars built here could suddenly be marked as Chinese or Korean. We want leniency while we rush to gain our own supply.
However, because we will never match China on the price of existing lithium ion formulations, we’re kidding ourselves if we think we will persuade a car maker like Jaguar Land Rover to buy a more expensive battery that uses the same chemistry.
“The challenge the UK has got is that the existing formulations are being knocked out of China at a very low price, so we’ve got to come up with new formulations and develop them,” said Colin Herron, who directs consultantcy Zero Carbon Future and, while at Nissan, set up the battery facility in Sunderland (now Chinese-owned, ironically).