Japanese cos rev up Brit car industry
High Japanese investments have made British workforce competitive and factories capable of turning out a quality product at a reasonable price
By Agencies |
SUNDERLAND: It’s a bit of a feather in the cap,” said Nissan’s head of European operations, Trevor Mann, of the export of Nissan’s British-made cars to Japan for the first time in more than a decade. Mr Mann said earlier this month at the Japanese group’s car plant in Sunderland, northeast England, where workers are churning out the Micra C+C convertible before the niche model’s impending launch in Japan.
Two months ago, Japanese car dealerships began selling the Sunderland-made Qashqai — a hybrid off-road compact car that in Japan has been named the Dualis.
Mr Mann, who recently became Nissan’s senior vice-president for manufacturing, purchasing and supply-chain management in Europe, described Japan as “the most severe and demanding market from a quality point of view.”
Both inside and outside of Nissan, the exports are seen as a major triumph, not only for the city of Sunderland and the wider northeast economy but also for Britain’s troubled automotive sector.
Prior to 2007, the last Sunderland Nissan model to head to Japan was the Primera, in 1996. Analysts say the renewed shipping of Nissan cars to the world’s second biggest economic power is like sending coals to Newcastle.
“You wouldn‘t make the C+C in Japan as well (as in Sunderland) because the volume is so small,” Mr Mann said in his office above the huge plant that opened in 1986 on the site of a former airfield.
“The story that Britain faces is not particularly unique,” said Peter Wells, an auto-industry expert based at Cardiff University Business School. “Sometimes we tend to beat ourselves with the big stick, making out there must be something structurally wrong with the UK as a place to build cars.
“It’s too simplistic to say ‘it’s a case of the UK being uncompetitive.’ If you look at the US, Italy, the Netherlands ... they’re all under pressure now or have lost a significant amount of jobs recently as their existing companies have restructured,” Mr Wells said.
US car firms Ford, GM and Chrysler are each in the process of shedding vast numbers of jobs, reducing capacity and closing factories in the United States, he noted.
Japanese companies are also facing financial difficulties. Nissan in April reported the first drop in annual profits under its legendary chief executive Carlos Ghosn.
Three Japanese car plants in England — Nissan in Sunderland, Toyota in Burnaston and Honda in Swindon — are among the best in Europe for efficiency and product-quality, according to Nick Seale, an expert on the automotive industry.
Mr Seale, who works for the Warwick Manufacturing Group, a British research body, said the choice of location by Japanese companies for the three plants has contributed massively to their success. “They chose locations that had no motor history, allowing the plants to be set up with Japanese practices right from day one.”
Nissan, Britain’s biggest car plant for the past nine years, has invested £2.4 billion ($4.89 billion dollars) in its Sunderland operation, which is staffed by 4,400 workers.
“The Japanese tend to have the newer parts, the newer investments which will give them a starting point advantage,” said Wells of Cardiff University. “The Japanese have shown that if you do put the money in, the British workforce is entirely capable of being competitive, certainly in European terms, and turning out a quality product at a reasonable price.”
Mr Wells noted also that Japanese companies have the advantage of a somewhat younger workforce compared to European or US companies operating in Britain. “Mass production is tough work and certainly the Japanese companies have benefited in being able to recruit a relatively younger-aged staff,” said Mr Wells.
Two months ago, Japanese car dealerships began selling the Sunderland-made Qashqai — a hybrid off-road compact car that in Japan has been named the Dualis.
Mr Mann, who recently became Nissan’s senior vice-president for manufacturing, purchasing and supply-chain management in Europe, described Japan as “the most severe and demanding market from a quality point of view.”
Both inside and outside of Nissan, the exports are seen as a major triumph, not only for the city of Sunderland and the wider northeast economy but also for Britain’s troubled automotive sector.
Prior to 2007, the last Sunderland Nissan model to head to Japan was the Primera, in 1996. Analysts say the renewed shipping of Nissan cars to the world’s second biggest economic power is like sending coals to Newcastle.
“You wouldn‘t make the C+C in Japan as well (as in Sunderland) because the volume is so small,” Mr Mann said in his office above the huge plant that opened in 1986 on the site of a former airfield.
ADVERTISEMENT
“To tool up for that in two places would be extremely expensive,” he added. Nissan’s success with the Sunderland plant comes as British car factories owned by other foreign firms are ending production or face the prospect of closing.“The story that Britain faces is not particularly unique,” said Peter Wells, an auto-industry expert based at Cardiff University Business School. “Sometimes we tend to beat ourselves with the big stick, making out there must be something structurally wrong with the UK as a place to build cars.
“It’s too simplistic to say ‘it’s a case of the UK being uncompetitive.’ If you look at the US, Italy, the Netherlands ... they’re all under pressure now or have lost a significant amount of jobs recently as their existing companies have restructured,” Mr Wells said.
US car firms Ford, GM and Chrysler are each in the process of shedding vast numbers of jobs, reducing capacity and closing factories in the United States, he noted.
ADVERTISEMENT
Ford is also looking at the option of selling Land Rover and Jaguar, which together employ 19,000 workers in Britain. Elsewhere, French car group Peugeot recently shut its plant in Coventry, central England — the same region that suffered after MG Rover went bankrupt in 2005.Japanese companies are also facing financial difficulties. Nissan in April reported the first drop in annual profits under its legendary chief executive Carlos Ghosn.
ADVERTISEMENT
However a combination of success in Britain and expansion into eastern Europe is helping the Japanese groups to remain leading players in the global auto sector.Three Japanese car plants in England — Nissan in Sunderland, Toyota in Burnaston and Honda in Swindon — are among the best in Europe for efficiency and product-quality, according to Nick Seale, an expert on the automotive industry.
Mr Seale, who works for the Warwick Manufacturing Group, a British research body, said the choice of location by Japanese companies for the three plants has contributed massively to their success. “They chose locations that had no motor history, allowing the plants to be set up with Japanese practices right from day one.”
Nissan, Britain’s biggest car plant for the past nine years, has invested £2.4 billion ($4.89 billion dollars) in its Sunderland operation, which is staffed by 4,400 workers.
“The Japanese tend to have the newer parts, the newer investments which will give them a starting point advantage,” said Wells of Cardiff University. “The Japanese have shown that if you do put the money in, the British workforce is entirely capable of being competitive, certainly in European terms, and turning out a quality product at a reasonable price.”
Mr Wells noted also that Japanese companies have the advantage of a somewhat younger workforce compared to European or US companies operating in Britain. “Mass production is tough work and certainly the Japanese companies have benefited in being able to recruit a relatively younger-aged staff,” said Mr Wells.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
