Hit by Brexit and Covid-19, the British automotive industry is slowly waking up

Hit by Brexit and Covid-19, the British automotive industry is slowly waking up
Hit by Brexit and Covid-19, the British automotive industry is slowly waking up

Opened in 1986 under Margaret Thatcher, the site has become an economic powerhouse in the north-east of England, generating nearly 30,000 indirect jobs. In 2023, it assembled more than a third of the UK’s total car production, or nearly 325,000 Juke and Qashqai models. The latter, allocated to the plant in 2006, was a game-changer. Almost twenty years later, its success is undiminished. “On average you’re never more than 500 metres from a Qashqai in the UK,” smiles Adam Pennick, vice president of manufacturing, aware of the luck the region had in welcoming Nissan. The manufacturer came here looking “port access, an abundant workforce that did not know how to build cars, which allowed him to train them from the start in his methods.”


In 2023, the Nissan site assembled nearly 325,000 Juke and Qashqai models. © Come Sittler

Today, it’s time for another apprenticeship: the mass production of electric vehicles. In Sunderland, some Nissan employees have already mastered this technology, after having assembled the defunct Leaf for many years. Production is about to change scale in the coming years, with the manufacturer having announced that it will invest £3 billion to produce two new battery-powered models. To ensure its supply, it will be able to count on AESC Envision. The Sino-Japanese company is building a gigafactory nearby, which will begin operations in 2025 with 1,000 employees and an initial capacity of 12 GWh. Nearby, the dust raised by the ballet of construction equipment stings the eyes of curious visitors.

Rain of investments


“The future of this automobile basin seems assured, at least for the next ten years,” rejoices Paul Butler, who heads the alliance of car manufacturers in the region. It was not a given. The last few years have been tough for the British car industry. Between Brexit, the Covid pandemic and supply shortages, vehicle production fell sharply between 2019 and 2022, from 1.3 million to 775,000 units. Worse, investment promises have vanished, in an unfavorable economic climate. In 2021, Honda decided to close its Swindon plant in the south of the country while the start-up Britishvolt, which had big ambitions in terms of battery manufacturing, did not escape bankruptcy. More recently, the electric van manufacturer Arrival has also encountered major financial difficulties.

The situation took a new turn in 2023. While the race for public subsidies was in full swing in the United States and Europe, the United Kingdom managed to attract £23.7 billion in investment promises in a single year. By comparison, this amount was £17 billion between 2016 and 2022. Among the major announcements, there is above all the £15 billion committed by Jaguar Land Rover, owned by the Indian Tata, of which £4 billion will be dedicated to a second battery gigafactory in Somerset, near Bristol, creating up to 4,000 jobs. As for BMW, the German manufacturer announced an investment of £600 million to continue producing its iconic all-electric Mini Cooper in Oxfordshire, after threatening for several months to relocate production. If the sector gave the impression that it was stalling, it has clearly put the turbo back on.

Broad ambitions in batteries

A victory for outgoing Conservative Prime Minister Rishi Sunak, who considers the industry “as the jewel in our manufacturing crown” and was counting on building on its record in the general election on 4 July. British manufacturers are expecting a complete overhaul of the country’s industrial strategy, which was published at the end of 2023 at the same time as a battery strategy. Optimistically, it estimates that this sector could employ up to 100,000 people in 2040, including 35,000 in cell manufacturing and 65,000 in the battery supply chain.

As in the rest of Europe, the latter still largely needs to be built. Just like the long-awaited electric vehicles. Because while investments are pouring in, the United Kingdom is lagging behind industrially. While 16% of new registrations now concern electric vehicles in the UK, almost all of these were imported in 2023.

Customs duties postponed in extremis

It’s a subject that could have ruined the British car industry’s renaissance. Following Brexit, the trade agreement between the European Union and the United Kingdom provides that all manufacturers on both sides of the Channel must comply with the “rule of origin”. This defines criteria for determining the country of origin of a product and was to apply to the car industry from 1 January 2024. In short, manufacturers had to prove that more than 45% of their vehicles were assembled in one or the other region, or face a 10% customs duty.

Faced with pressure from manufacturers, and in particular from Stellantis, which openly put the maintenance of its utility vehicle manufacturing activities in Luton and Ellesmere Port in the balance, the authorities agreed in extremis on a single postponement of the application to 1 January 2027. It was less one for the British industry, which is not yet able to mass produce electric vehicles (whose battery represents 35 to 40% of the cost). The country imports 71% of its new cars and exports almost 80% of its production, with around six out of ten cars sent to the EU.

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