British car industry roars by European rivals

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Published September 15, 2013

| AFP

Britain is accelerating away from its European competitors in the car-making sector with investment flowing into the factories of Nissan and Jaguar Land Rover as Chinese and American demand drives sales.

Jaguar Land Rover said on Tuesday it was pumping ??1.5 billion (1.8 billion euros, $2.4 billion) into its plant in Solihull near Birmingham, creating 1,700 jobs and giving a welcome fillip to industrial central England.

The Solihull plant will make new lightweight Jaguar and Land Rover models made of aluminium.

In northeast England, Nissan has been granted permission to extend its already vast plant in Sunderland, securing jobs in an area where major employers are in short supply.

The investment decision was announced at the Frankfurt Motor Show by JLR chief executive Ralf Speth, who said it was "further evidence of our commitment to advancing the capability of the UK automotive sector and its supply chain".

JLR now employs 11,000 people in Britain, with another 24,000 employed in its supply chain.

Joe Rundle, an analyst at ETX Capital, credited the British government with reviving an industry that once looked close to extinction.

"The UK automaking industry was considered a dying sector as car factories produced high volume motors by low-skilled manufacturing," he said.

"However, the UK government's initiatives to kick-start manufacturing activity is turning the country's auto making industry into one of premium niche manufacturing."

The government announced in March that it was pumping ??500 million into the auto sector.

Demand from China and the recovering US economy are credited with driving sales.

Toyota, Nissan and BMW are among other carmakers injecting more and more money into top-of-the-range models made in Britain.

Nissan was granted planning permission this month for a 25,000 m2 extension of its factory in Sunderland. The ??250 million addition to the factory extension will produce models for its luxury Infiniti division.

In March, Nissan launched production of its fully-electric Leaf with ??420 million of investment, creating an additional 500 jobs in the process, proving that the Sunderland factory is bouncing back with a vengeance -- in 2009 Nissan cut a quarter of the 5,000 workers there.

The rude health of the top-of-the-range sector is also underlined by the success of Rolls-Royce which last year set record-breaking sales figures for the third year running with 3,575 cars made by hand. Rolls-Royce too is expanding its factory, in Sussex in southeast England.

It's not all good news. Late last year, Ford closed down production of its Transit van at Southampton on the south coast with the loss of 1,500 jobs. And Japanese firm Honda shaved 800 jobs from the 3,500 workforce at its Swindon factory in southwest England, as Europe's economic doldrums took their toll.

But while carmakers elsewhere in Europe are only just climbing out of the slump, Britain saw sales up 11 percent in August compared to a year earlier.

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