Fair Assessment on UK production by Professor Bailey

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    Dorset Rocket

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    Fair Assessment on UK production by Professor Bailey

    Post by Dorset Rocket on Wed Sep 28, 2016 2:32 pm

    Professor Bailey from Aston University gave a fair assessment of MG's decision to end limited final assembly in the UK:

    'I think MG through Shanghai Automotive's owner have been kind of hanging on there.
    They've had a flawed business model in that it was importing virtually the entire car for Longbridge with some very limited assembly, about 40 to 50 workers.
    I think what has really scuppered them is the Brexit vote.
    They had fundamental business problems in that they were not selling as many cars as they hoped and they had the big import costs of components.
    Post Brexit though, with the devaluation of stirling those imports were much more expensive so costs are higher and there is uncertainty about the future on the trading relationships in Europe.
    What they had hoped to do was use the UK as a launch pad for selling into Europe. If - big if - we are no longer part of the single market what is the point of investing there?'


    Fair comments in my view
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    patpending

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    Re: Fair Assessment on UK production by Professor Bailey

    Post by patpending on Thu Sep 29, 2016 2:24 am

    I agree. Nissan is now committed to Sunderland while Toyota has been hedging its bets for decades. The Yaris plant in France now looks politically less risky. We have seen many false dawns on EU exports and it may be just as well that no big commitment was made.

    On the other hand, valuable *years* have been lost in which time Hyundai (especially) and Kia have become established in Germany and Dacia in France. They have to start sometime! They just need to avoid another South Africa or, worse, another Australia.

    Magnette

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    Re: Fair Assessment on UK production by Professor Bailey

    Post by Magnette on Tue Oct 11, 2016 4:52 am

    I tend to feel that Brexit is the convenient excuse they've been looking for. After the demise of the MG6 and the decision to import the GS fully built, and the last batch of MG3 arriving complete (all prior to the referendum), the manufacturing facility was surplus.

    Irritatingly the website still talks about the Longbridge manufacturing facility (why they can't synchronise PR releases and web updates I will never know).

    The language used is significant too - production is 'ending', not that the facility is 'being mothballed'. So I suppose the last conveyors and equipment will go and they will be left with two vast storage hangars - will they use them or do the imported cars go straight to the dealers? Is the MG3 personalisation process happening at Longbridge or are all the colour coded trim inserts and decal packs being done by the dealers now?

    Which begs the question as to what happens to the site now? What is the point of having that facility in that location? Where do the valuable employees actually live? I don't doubt that they will keep the European design studio in the UK (at some point they MUST go into the EU states) and they've installed new design facilities but that'll be far easier to relocate than a manufacturing plant. They don't need all the room they have there. Unless they have a very long lease at a peppercorn rent, I'd say there's a decent chance they'll be on the move in 10 years or so to somewhere with better links to London.

    Somewhere near Abingdon maybe. Cool

    Dorset Rocket

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    Re: Fair Assessment on UK production by Professor Bailey

    Post by Dorset Rocket on Tue Oct 11, 2016 1:18 pm

    There is no doubt they have made the right decision to stop 'production' or finishing in the UK and my understanding is that the imported cars go direct to the dealers now (look at the websites and FB pages for WH Brand and the new dealer Leasure World Motors and they show new car deliveries with protective covers on the doors and bumpers - they did not leave Longbridge with these on).

    Yes Brexit may be the final straw but the motor industry is still coming to terms with it's impact and MG are unlikely to be the last to reduce or even stop production in the UK as a result. Lets hope that the ££ does not fall so low that all imported products become too expensive and the economy stops totally.

    Regarding space at Longbridge - well there was some talk of SAIC starting production of the revitalised LDV van range in the UK a few months ago..!

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