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Automotive News, July 2019

AUTOMOTIVE

The government is pumping nearly £40m into improving the infrastructure for electric vehicles despite a sharp drop in hybrid car sales. The Department for Transport will invest in UK engineering to “transform” the network of electric charge points.

Wireless charging and “pop-up” pavement technology are among the investments being made. Sales of plug-in hybrid vehicles slumped by 50.4% in June after the government scrapped a £2,500 grant.

However, the DfT said it was “focusing on the cleanest, zero emission models”. New UK car registrations for battery electric cars rose by 61.7% to 2,461 in June compared with the same month last year, according to figures from the Society of Motor Manufacturers and Traders (SMMT). However, the drop in demand for plug-in hybrid cars, which fell from sales of 4,571 vehicles last June to 2,268 vehicles last month, meant that overall the alternatively fuelled vehicle sector shrank for the first time since April 2017.

 A DfT representative said: “The plug-in car grant has supported the purchase of 180,000 new cars with over £700m, including 100,000 plug-in hybrids.” As well as scrapping the grant for plug-in hybrid models last year, the government also reduced the subsidy for pure electric cars from £4,500 to £3,500.

It also announced last year that it would end the sale of all new conventional petrol and diesel cars and vans by 2040.

BMW has given a boost to the UK car industry by confirming production of its new electric Mini will start in Cowley in November. Deliveries of the first fully electric car will start in March 2020.

Earlier this year, a BMW board member said the company would have to consider moving car production out of the UK if there was a no-deal Brexit. However, David George, head of Mini UK, told the BBC the UK was firmly in the company’s plans going forward.

“It is too early to say what the impact of Brexit will be,” he told the BBC. “But as a business, we have committed and invested heavily over recent years in our production facilities in the UK, so we remain committed to UK production.

“The team here at Plant Oxford are incredibly proud that it’s been chosen to be the plant to launch the first all-electric Mini.”

When asked if that meant the company would still be producing cars in the country in 10 years’ time, he said: “It is impossible to see that far ahead.

“However, the UK is an important part of our capacity requirements for the future.”

The new bit of the electric Mini – the drivetrain – will be produced in Dingolfing in Bavaria, before being brought to Cowley to be added into the car.

“We source components for the cars in multiple places,” Mr George added. “We do our body pressings in Swindon, so we make the best of what we can from across different manufacturers. But we’re delighted to be producing the car here in Oxford.”

The news comes after announcements this year about Ford proposing to close its plant in Bridgend and Honda revealing plans to shut its plant in Swindon, with the loss of about 3,500 jobs.

BMW originally announced that Cowley would be the production base for the car in the summer of 2017.

Earlier that year, though, its chief executive had warned that the company needed to remain “flexible” about its production facilities because of Brexit uncertainty.

The state-of-the art automated Cowley plant has more than 1,000 robots on the assembly line and produces a car about once a minute

Sales of low emission cars in the UK have fallen for the first time in more than two years, the industry has said. The decline comes as overall sales of new cars continued to fall, dropping 4.9% in June from the year before.

The Society of Motor Manufacturers and Traders said the fall in alternatively fueled cars, such as hybrid electric vehicles, was “a grave concern”.

It said efforts to sell such cars were being undermined by confusing policies and “premature” removal of subsidies.

The SMMT said sales of plug-in hybrid cars in June had halved since the same month a year earlier, while hybrid electric vehicle sales were down 4.7%. This meant that the alternatively fueled car sector saw overall sales fall for the first time since April 2017. In 2018’s Budget, subsidies for plug-in hybrids were scrapped, and reduced for battery electric vehicles.

Seeing another month of decline is worrying but the fact that sales of alternatively fuelled cars are going into reverse is a grave concern,” said Mike Hawes, SMMT chief executive.

“Manufacturers invested billions to bring these vehicles to market but their efforts are now being undermined by confusing policies and the premature removal of purchase incentives.

“If we are to see widespread uptake of these vehicles, which are an essential part of a smooth transition to zero emission transport, we need world-class, long-term incentives and substantial investment in infrastructure.”

A Department for Transport spokesperson said: “The plug-in car grant has supported the purchase of 180,000 new cars with over £700m, including 100,000 plug-in hybrids, and the government is now focusing on the cleanest, zero emission models.

“That focus has paid off – with registrations of battery electric vehicles up over 60% this year compared to the same period in 2018.”

Jaguar Land Rover (JLR) is investing hundreds of millions of pounds to build a range of electric vehicles at its Castle Bromwich plant in Birmingham.

Initially the plant will produce an electric version of the Jaguar XJ. JLR says the move will help secure the jobs of 2,700 workers at the plant.

The news follows January’s announcement, when the firm said it would cut 4,500 jobs, with the majority coming from the UK. That followed 1,500 jobs lost in 2018.

JLR has not announced when it will launch the battery version of the XJ, but it will replace the petrol and diesel versions which have been made since 1968.

The company’s chief executive, Professor Ralph Speth, called on the government to put more effort into providing charging points for electric cars.

“The current charging infrastructure is not really sufficient to cover the country, nor the hotspots of the cities,” he said in an interview with the BBC.

“The government has to govern the process,” he added.

BMW has shifted some of its engine production from its Warwickshire plant at Hams Hall to Germany as part of changes caused by Brexit.

The move was revealed as the manufacturer launched the first electric Mini model at its Cowley plant in Oxfordshire. The change has been driven by the tax status of vehicles. EU-manufactured engines, which are exported to South Africa, where BMW assembles its X3, and re-imported into Europe, have favourable tax treatment because of the “local content”.

Post-Brexit, UK-manufactured items would no longer count towards EU’s locally produced content. That would have the effect of these vehicles losing their tax-free treatment.

Shifting engine production from the UK to Germany means that will not happen.

Head of production Oliver Zipse – the former head of the Cowley site who is considered the favourite to become BMW’s new chief executive – said: “Hams Hall doesn’t build any South Africa products anymore, which is of course, bad for the UK.” Although he said the number of engines affected is “not a huge amount” – and Hams Hall production volumes are expected to be stable this year – the impact is a concern for an industry that has already been hit by a number of problems.

Closures have been announced for Honda’s Swindon plant and Ford’s Bridgend site, PSA Group has threatened to pull the new Vauxhall Astra from Ellesmere Port if a no-deal Brexit occurs, and Jaguar Land Rover has cut thousands of jobs in the past year. While some of the factors are not linked to Brexit, with the slowdown in the Chinese market and the shift away from diesel each having significant impacts, there remains an alertness that the UK’s car industry can ill-afford more bad news.

That is why Jaguar Land Rover’s confirmation last week of billions of pounds of investment for the production of electric vehicles at Castle Bromwich was so well received, even if JLR’s chief executive Ralf Speth did inject a large warning about another problem for the industry that is looming.

“One thing is clear,” he said. “If batteries go out of the UK, then also the automotive production will go out of the UK.”