Japanese seen handling most British car production

by William Hollingworth

LONDON (Kyodo) Japanese manufacturers are expected to produce more than half of Britain’s cars for the first time this year following years of substantial investment and the demise of the last British-owned mass carmaker.

Figures show that Nissan Motor Co., Toyota Motor Corp. and Honda Motor Co. will produce around 800,000 of the 1.53 million automobiles that the Society of Motor Manufacturers and Traders Ltd. predicts will be made in 2006.

Keith Lewis, media manager for the SMMT, said it is difficult to predict future output levels, but “there’s every expectation they could well breach the 50 percent mark.”

“The Japanese manufacturers are leading the way,” he said. “They have been here the longest and have invested in plants and skills, which means production levels are at the levels they are at.”

The three big Japanese carmakers confirmed they will be increasing production in 2006.

Of four non-Japanese makers in Britain, two said they are reducing output in 2006, while one hopes to match 2005 levels and another declined to give forecasts.

Professor Garel Rhys, director of the center for automotive industry research at Cardiff University, said the figures show the Japanese are a “major partner” in the British motor industry and better understand their European customers.

“The products they (the Japanese) are making are now much more successful. It took them some time to come to terms with the fact they needed to make vehicles more specific for the European market,” he said.

Nissan was the first Japanese carmaker in Britain, setting up in Sunderland, northeast England, in 1986.

Others followed, lured by a well-educated workforce, a proud car-making history, plus government aid.

Many in the industry saw the Japanese as a breath of fresh air in a sector that had seen domestic manufacturers struggle to make profits. Famous brand names like Jaguar, Mini and Rolls Royce were taken over by foreign companies.

In April 2005, MG Rover Group Ltd., the last British-owned mass carmaker, collapsed under poor sales.

Rover’s absence from the ranks of Britain’s biggest car producers — in 2004 it made 106,000 cars — means that it is now more likely that the Japanese companies will make more that half of Britain’s cars in 2006.

According to SMMT, Nissan, Toyota and Honda together produced 48 percent of Britain’s 1.6 million cars in 2005.

This year, Nissan expects to continue to be the biggest producer with 320,000 cars. The Sunderland plant will also be making a new small car, the Note, and the four-wheel-drive Qashqai model, which could see output rise to 400,000 by the end of 2007, according to Nissan spokesman David Swerdlow.

“We only build models which the market can support and Nissan is delivering the right products in the market,” he said.

Toyota said production capacity at its plant is 285,000 cars and it “expects to reach capacity” in 2006. Honda expects to produce around 195,000 cars. These will be exported to Japan.

BMW, which produces the Mini at Oxford, was in third place last year. A spokeswoman said production will dip slightly to 180,000 from 200,000 in 2005 due to investments at its plant designed to increased production in the long term. She added that 13,341 Minis were exported to Japan in 2005.

Vauxhall, part of General Motors Corp., said it couldn’t give any forecasts.

Rhys said that of the Japanese manufacturers, Toyota is doing particularly well in Europe. He added BMW’s Mini and Land Rover, which is owned by Ford, are also achieving good sales.

Both Rhys and Lewis believe that Japanese manufacturers have had a profoundly beneficial effect on the British car industry, which at one time was not held in high regard.

“When looking at the Japanese carmakers it was like looking at an MBA program for best practice in manufacturing,” Rhys said. “The Japanese showed that you could make good cars in the United Kingdom and they gave confidence to other vehicle manufacturers. The message went out that there were no problems with British quality.”