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    Automotive & Motorsport

    Car sector follows an electric avenue after a punishing year

    • By MTDCNC
    • March 23, 2021
    • 7 minute read

    One third. That’s about the size of the decline in the UK automotive sector as measured by several metrics in 2020.

    Car production in the UK fell 29.3% in 2020 to 920,928 units, the lowest total since 1984, and car exports were down 29.1%. Production for the UK and overseas markets fell at similar levels, around 30%. In December and January, output was affected by border closures and component supply issues. UK HGV registrations fell 32% in 2020, as operators postponed fleet renewal and bus and coach registrations also fell 32% as the Covid pandemic hit demand. The Covid pandemic and recession has hit automotive sales very hard.

    The automotive industry is adapting to big changes – electrification, Covid-19, Brexit, net-zero carbon and changing attitudes to car ownership. Electrification is the biggest long term trend, driven by the UK government’s ‘green revolution’ pledge where it has set out a ban on the sale of new cars and vans powered wholly by petrol and diesel from 2030. In February, motorists group The AA surveyed nearly 13,000 drivers who predicted that by 2030, electric vehicles (EVs) will outnumber diesel on UK roads.

    Jaguar Land Rover (JLR) made a bold commitment to EVs in mid-February when it announced it would offer fully electric versions of all models by 2030, and the Jaguar brand will be all-electric by 2025. The major shift is part of the automaker’s plan to become a net-zero carbon business by 2039. Longer-term, hydrogen fuel cell-powered cars could feature as well, prototypes may start rolling onto UK roads in a year with diesel being ditched from 2026.

    The Tata Motors-owned company had a strong finish to 2020; retail sales for the quarter ending December 2020 were 128,469 vehicles, 13.1% higher than the 113,569 units sold in the preceding quarter, but down 9.0% on the same period last year. China sales came back strongly, up 20.2% on the prior quarter and 19.1% year-on-year.

    The direction of travel is now clear, but big questions remain, says Professor David Bailey, an automotive industry expert at the Birmingham Business School. “What models will it make? How many cars will it aim to produce? How many workers will it need? And can the company shift to an electric future on its own or will it need a partner? Positively, JLR has said that it won’t shut plants and that there will be no compulsory redundancies. That’s good news for unions and workers. The firm outlined investment plans for new platforms at Solihull and Halewood but not Castle Bromwich, so where does that leave the latter, especially as the firm has canned the electric XJ model meant to be produced there?”

    Ford has also confirmed that its entire European passenger car range will be electric by 2030.

    BMW: 20th birthday for Hams Hall and

    one in three MINIs are electric

    BMW in the UK has had some mixed results. Last year, MINI sold a total of 292,582 cars worldwide, 189,998 or 64% of which were built at Oxford (including the 3-Door Hatch, MINI Electric, 5-Door Hatch and Clubman). MINI sales in the UK totalled 46,109, down 29% on UK sales in 2019 of 64,884 vehicles; a record 2.8% market share, maintained from 2018 to 2020.  

    The Hams Hall plant celebrated its 20th anniversary of manufacturing engines in February.

    A total of 354,663 engines were manufactured at Hams Hall in 2020, around 40% of which were petrol engines supplied to the Oxford plant. Engine production in 2019 was 392,528, a good return but nearly 38,000 units or 9.6% down on 2019. 

    BMW is also going full-bore electric. After the successful launch of the MINI Electric last year, a total of 17,580 were built at the Oxford plant and sold around the world, 3,385 in the UK. In 2021, one in three MINI 3-door hatches built in Oxford will be electric, reflecting the strong customer demand for electric and plug-in hybrid vehicles. After the Covid hiatus, BMW’s manufacturing sites are full steam ahead with the Oxford plant and Hams Hall running three shifts and Swindon running at the usual capacity. 

    Coventry Airport ‘gigafactory’

    More good news for the UK’s EV industry came in February when a site for a battery ‘gigafactory’ was proposed at Coventry Airport. A gigafactory is the name adopted for factories that build electric car batteries. The West Midlands Combined Authority approved the site and, if planning permission is granted, Coventry Council says it could be operational by 2025. From this location, batteries could easily be supplied to JLR at Castle Bromwich, Whitley and Solihull, as well as BMW Hams Hall, the London Electric Vehicle Company in Ansty and even Aston Martin Lagonda.

    While this is ostensibly good news for UK automotive, you need to look further afield to assess the impact. David Bailey sounds another note of caution. “Coventry earmarking a site for a gigafactory is an important first step, but only a first step. Planning permission is needed, along with government support and the interest of a big battery manufacturer. But at least the city and the region ‘get’ how mission-critical this is to UK auto, so hats off to them. Essentially, the race is on to build batteries at scale. Huge investment is going into EU countries to do this, with considerable amounts of government and EU support. The UK needs to play catch up, and quickly.”

    He adds there is a Brexit dimension here as well. “As the Brexit trade deal has a 2026 date for batteries in BEVs [battery electric vehicles] to be made in the EU or UK for the final cars to qualify for tariff-free trade,” Bailey says. “The danger is that BEV assembly will migrate to where the batteries are available cheaply. Put simply, this is an existential threat to the future of UK automotive.” Tesla, the world’s biggest electric vehicle manufacturer, selected Germany over the UK for Tesla’s European gigafactory. It’s not clear how much money the US company will receive in EU support on top of incentives from Germany, but experts say it will be hundreds of millions of Euros.

    British supercars spark up

    Like all automotive, Britain’s famous sports and supercar industry was hit by the Covid pandemic, but some British sports marques are charging back and, again, electric dominates. Lotus Group has invested more than £100 million across the whole business since 2019, building a new facility to manufacture the £2 million, 2000bhp electric hypercar Evija and now the new Type 131 sports car. The signature Elise, Evora and Exige models will be discontinued in 2021 as part of Lotus’ Vision80 strategy, which also sees the relocation of two sub-assembly facilities into one efficient operation in Norwich to support higher volumes. Along with the £100 million investment, Lotus says it will recruit about 250 new employees, and this is in addition to the 670 to have joined Lotus since September 2017, when shareholders Geely and Etika took ownership of the company.

    Three years ago, McLaren built a factory at the Advanced Manufacturing Park near Sheffield to manufacture the carbon fibre monocoque used in its road-legal supercars. In February this facility, the McLaren Composite Technology Centre, revealed the stunning Artura, its first series production, high-performance hybrid supercar. With an electric motor, it provides very fast throttle response, lower emissions and can run in pure EV mode for emission-free journeys of up to 19 miles.

    And the positive news in automotive is not confined to cars and sports cars.

    Alexander Dennis, owned by Chinese bus maker BYD, is moving the manufacture of the chassis of both its BYD ADL branded single and double-decker electric buses to the UK. Previously, these have been manufactured in Hungary and China. This now means the entirety of these electric buses are manufactured and assembled in the UK.

    https://cdn.mtdcnc.global/cnc/wp-content/uploads/2021/03/23174342/P90410142_highRes_rolls-royce-ghost-ca-640x360.jpg

    Car sector follows an electric avenue after a punishing year

    One third. That’s about the size of the decline in the UK automotive sector as measured by several metrics in 2020.

    Car production in the UK fell 29.3% in 2020 to 920,928 units, the lowest total since 1984, and car exports were down 29.1%. Production for the UK and overseas markets fell at similar levels, around 30%. In December and January, output was affected by border closures and component supply issues. UK HGV registrations fell 32% in 2020, as operators postponed fleet renewal and bus and coach registrations also fell 32% as the Covid pandemic hit demand. The Covid pandemic and recession has hit automotive sales very hard.

    The automotive industry is adapting to big changes – electrification, Covid-19, Brexit, net-zero carbon and changing attitudes to car ownership. Electrification is the biggest long term trend, driven by the UK government’s ‘green revolution’ pledge where it has set out a ban on the sale of new cars and vans powered wholly by petrol and diesel from 2030. In February, motorists group The AA surveyed nearly 13,000 drivers who predicted that by 2030, electric vehicles (EVs) will outnumber diesel on UK roads.

    Jaguar Land Rover (JLR) made a bold commitment to EVs in mid-February when it announced it would offer fully electric versions of all models by 2030, and the Jaguar brand will be all-electric by 2025. The major shift is part of the automaker’s plan to become a net-zero carbon business by 2039. Longer-term, hydrogen fuel cell-powered cars could feature as well, prototypes may start rolling onto UK roads in a year with diesel being ditched from 2026.

    The Tata Motors-owned company had a strong finish to 2020; retail sales for the quarter ending December 2020 were 128,469 vehicles, 13.1% higher than the 113,569 units sold in the preceding quarter, but down 9.0% on the same period last year. China sales came back strongly, up 20.2% on the prior quarter and 19.1% year-on-year.

    The direction of travel is now clear, but big questions remain, says Professor David Bailey, an automotive industry expert at the Birmingham Business School. “What models will it make? How many cars will it aim to produce? How many workers will it need? And can the company shift to an electric future on its own or will it need a partner? Positively, JLR has said that it won’t shut plants and that there will be no compulsory redundancies. That’s good news for unions and workers. The firm outlined investment plans for new platforms at Solihull and Halewood but not Castle Bromwich, so where does that leave the latter, especially as the firm has canned the electric XJ model meant to be produced there?”

    Ford has also confirmed that its entire European passenger car range will be electric by 2030.

    BMW: 20th birthday for Hams Hall and

    one in three MINIs are electric

    BMW in the UK has had some mixed results. Last year, MINI sold a total of 292,582 cars worldwide, 189,998 or 64% of which were built at Oxford (including the 3-Door Hatch, MINI Electric, 5-Door Hatch and Clubman). MINI sales in the UK totalled 46,109, down 29% on UK sales in 2019 of 64,884 vehicles; a record 2.8% market share, maintained from 2018 to 2020.  

    The Hams Hall plant celebrated its 20th anniversary of manufacturing engines in February.

    A total of 354,663 engines were manufactured at Hams Hall in 2020, around 40% of which were petrol engines supplied to the Oxford plant. Engine production in 2019 was 392,528, a good return but nearly 38,000 units or 9.6% down on 2019. 

    BMW is also going full-bore electric. After the successful launch of the MINI Electric last year, a total of 17,580 were built at the Oxford plant and sold around the world, 3,385 in the UK. In 2021, one in three MINI 3-door hatches built in Oxford will be electric, reflecting the strong customer demand for electric and plug-in hybrid vehicles. After the Covid hiatus, BMW’s manufacturing sites are full steam ahead with the Oxford plant and Hams Hall running three shifts and Swindon running at the usual capacity. 

    Coventry Airport ‘gigafactory’

    More good news for the UK’s EV industry came in February when a site for a battery ‘gigafactory’ was proposed at Coventry Airport. A gigafactory is the name adopted for factories that build electric car batteries. The West Midlands Combined Authority approved the site and, if planning permission is granted, Coventry Council says it could be operational by 2025. From this location, batteries could easily be supplied to JLR at Castle Bromwich, Whitley and Solihull, as well as BMW Hams Hall, the London Electric Vehicle Company in Ansty and even Aston Martin Lagonda.

    While this is ostensibly good news for UK automotive, you need to look further afield to assess the impact. David Bailey sounds another note of caution. “Coventry earmarking a site for a gigafactory is an important first step, but only a first step. Planning permission is needed, along with government support and the interest of a big battery manufacturer. But at least the city and the region ‘get’ how mission-critical this is to UK auto, so hats off to them. Essentially, the race is on to build batteries at scale. Huge investment is going into EU countries to do this, with considerable amounts of government and EU support. The UK needs to play catch up, and quickly.”

    He adds there is a Brexit dimension here as well. “As the Brexit trade deal has a 2026 date for batteries in BEVs [battery electric vehicles] to be made in the EU or UK for the final cars to qualify for tariff-free trade,” Bailey says. “The danger is that BEV assembly will migrate to where the batteries are available cheaply. Put simply, this is an existential threat to the future of UK automotive.” Tesla, the world’s biggest electric vehicle manufacturer, selected Germany over the UK for Tesla’s European gigafactory. It’s not clear how much money the US company will receive in EU support on top of incentives from Germany, but experts say it will be hundreds of millions of Euros.

    British supercars spark up

    Like all automotive, Britain’s famous sports and supercar industry was hit by the Covid pandemic, but some British sports marques are charging back and, again, electric dominates. Lotus Group has invested more than £100 million across the whole business since 2019, building a new facility to manufacture the £2 million, 2000bhp electric hypercar Evija and now the new Type 131 sports car. The signature Elise, Evora and Exige models will be discontinued in 2021 as part of Lotus’ Vision80 strategy, which also sees the relocation of two sub-assembly facilities into one efficient operation in Norwich to support higher volumes. Along with the £100 million investment, Lotus says it will recruit about 250 new employees, and this is in addition to the 670 to have joined Lotus since September 2017, when shareholders Geely and Etika took ownership of the company.

    Three years ago, McLaren built a factory at the Advanced Manufacturing Park near Sheffield to manufacture the carbon fibre monocoque used in its road-legal supercars. In February this facility, the McLaren Composite Technology Centre, revealed the stunning Artura, its first series production, high-performance hybrid supercar. With an electric motor, it provides very fast throttle response, lower emissions and can run in pure EV mode for emission-free journeys of up to 19 miles.

    And the positive news in automotive is not confined to cars and sports cars.

    Alexander Dennis, owned by Chinese bus maker BYD, is moving the manufacture of the chassis of both its BYD ADL branded single and double-decker electric buses to the UK. Previously, these have been manufactured in Hungary and China. This now means the entirety of these electric buses are manufactured and assembled in the UK.