Vehicle sales are on the decline
The UK automotive industry is cutting jobs
These are ugly headlines for those employed in the UK automotive industry. The US trade tariffs introduced by Donald Trump have had a knock on effect to all UK manufacturers that have a market in the US. Jaguar Land Rover have recently reported they will be cutting up to 500 management jobs due to the change in sales and profits because of the US trade tariffs. Sales of their vehicles were paused due to the uncertainly of the tariffs. Alfa Romeo, Chrysler, Citroen and Dodge to name a few are also suffering from the tariffs.
UK based Lotus who manufacture vehicles in Norfolk and have an assembly plant in China, looked at one option of moving their production to the US. A high volume of Lotus cars are sold in the US, so a production plant there would make economic sense. Volvo are also trimming their workforce due to the reduction of sales attributed to the US tariffs, increased cost of materials and selling less cars in Europe.
Ironically, US car manufacturer Tesla have their own problems not related to US tariffs. Tesla’s brand has been dented and the company faces competition from Chinese car makers. Tesla is introducing new lower pricing to compete with their cheaper rivals.
The uncertainty of the UK economy has hit sales. Redundancies are up, some companies are cutting workforce to save costs. People worried about their jobs going forward do not want to commit to a new car purchase. The four wheeled transport is commonly the second most expensive acquisition one makes after a house purchase. Company and private leasing of new vehicles have however, have kept a demand in newly produced vehicles. Some prefer a set monthly outgoing in their budget with the benefit of driving a reliable motor with predictable running costs.
On the upside, Nissan’s new Leaf model is to be built at its Sunderland plant with an investment of £1bn for an additional electric car battery plant nearby. This is good news for the UK automotive industry. Let’s hope there will be more news like this in the near future and no more ugly headlines.
