[Closed] EU Referendum - are you in or out?

Breaking - Sunderland to be allowed to stay in EU after the rest of the UK leaves.

Breaking - Sunderland UK Exit Welcomed by May, asks for Hartlepool to be included.

We will end up with pretty much what we have now but with more cost and less influence - barking bloody mad.

if a hard brexit (no single market & customs union + import duties,) makes a car 10,20,50?% more expensive to produce here, how much does the taxpayer have to subsidise per car?

On balance very little.

Since those same tariffs would apply to imported cars, the net position would be that VAG / BMW / PeugeotCitroen / Renault group cars would immediately become significantly more expensive - likely resulting in UK consumers spending their money on UK produced cars instead.

So although exports from the UK would go down Nissan would likely gain significant market share in the UK with the result they would be capacity constrained at the Sunderland Plant.

Given much of the R&D for the Qasqhai is also done here they would benefit from a double "win" in the form of the Patent Box provisions that encourage domestic manufacturing of goods researched / developed here - something the EU specifically want to stop the UK offering.

Here's a thought. Would all the Brexiters fit in say Cornwall? There's only 17m of them (and falling). We could relocate them, build a big wall and put a sign up welcoming them to the 1700s. Brochures on whipping and capital punishment for them to "read".

Meanwhile the rest of us could get on with the 21st century.

I may not be entirely serious.

likely resulting in UK consumers spending their money on UK produced cars instead.

But they would also be more expensive due to overseas parts, no?

We will end up with pretty much what we have now but with more cost and less influence - barking bloody mad.

yes but we'll have Taken Back Control! Do you not get it?!

On balance very little.

Any stats to back that up? With 40% of a car made here, actually imported from elsewhere, customs, tarrifs applied several times on some parts

But they would also be more expensive due to overseas parts, no?

Why would they be anymore expensive than the Qashqai's produced now?

All this decision does it encourage Nissan's supply chain partners to produce more of the OE parts in the UK.

Per the Delphi example earlier in the thread there's no good reason for some of the current supply chain movements other than tax optimisation / avoidance and choices on where to commit Capex.

Capability can be built anywhere almost with the right capital investment and training of workforce. This is something that's not been right in the UK for a long time so it's about time we encouraged manufacturers to do more of their business here.

Capability can be built anywhere almost with the right capital investment and training of workforce. This is something that's not been right in the UK for a long time so it's about time we encouraged manufacturers to do more of their business here.

Not cheap, not quick. Who's paying and you do realise we will be importing people to make it happen?

Over a 10-20 year timeframe it might work, but there's a reason we employ so many foreign engineers for example (clue - its intellectually difficult and not that well paid compared to finance, consulting and management)

Yeah, let's build a wall and do everything here!

You seem to have failed to read all the earlier discussion - or just ignoring the inconvenient bits. The reason we don't do everything here is economy of scale, the advantages of being in a much larger free trade zone. Moving all the required supply chain here just wouldn't make economic sense - it's probably still cheaper to pay the tariffs.

Of course the other point you're missing is that most of the Nissan production is exported - the Uk market isn't going to pick most of that up, whatever the tariffs are on imported cars.

Capability can be built anywhere almost with the right capital investment and training of workforce

In two years?

igm - I agree but that still doesn't mean we should have an industrial strategy to make this happen.

Singapore have done this very successfully by balancing the flow of skilled migrants with an increase in training in key skills in their universities / technical colleges. The net result is that when Rolls Royce and many of the world leaders in Chemical industries expanded, they went to Singapore.

Brochures on whipping and capital punishment for them to "read".

They won't read them as they "fed up with experts!"

Of course the other point you're missing is that most of the Nissan production is exported - the Uk market isn't going to pick most of that up, whatever the tariffs are on imported cars.

And with respect, you're missing the point that when a comparable VW / Renault / BMW car costs 30% more than a UK produced car very few people will choose to spend 30% more. So Nissan's market share will almost certainly increase. It's just a rational consumer response to a change in retail price - the very same one that is already causing a headache for VW UK.

There are some other benefits as well though - if we take Nissan as the example:

- many of the cars currently exported by ocean routes are transported by ships that produce more Co2 and sulphur on the export leg than the the actual cars will in the whole service life. So more cars manufactured and used in the same country not only has a significant environmental benefit but also saves Nissan somewhere in the region of £1500 per vehicle in transport costs.

- selling more cars here means the overhead recoveries on manufacturing remain constant but with distribution costs avoided (like transport) going up. These may well completely offset any drop in profit caused by currency movements or tariffs on imported components

And with respect, you're missing the point that when a comparable VW / Renault / BMW car costs 30% more than a UK produced car very few people will choose to spend 30% more.

30% seems like a lot.

But with real prices of all cars going up (due to weaker £ and imported content of cars) and the economy struggling more due to brexit, that may be a larger share of a smaller market.

So Nissan's market share will almost certainly increase.

Do Nissan make all their models in the UK? If not… have another think.

Same goes for you comment on shipping. A single large joined up market (eg EU) means you can ship by rail. So can produce in one country on assumption that no boats required to ship to whole (huge) market.

A single country model makes no sense in terms of ecomonies of scale.

Looking to increase exports to countries much further afield makes no environmental sense.

[i]Why would they be anymore expensive than the Qashqai's produced now? [/I]

I think you'll find that Nissan currently have a spreadsheet already setup to show the UK Govt the increase in costs that they'll be looking for a refund of. And the other manufacturers will be following suit.

And what'll be in the spreadsheet? Anything Nissan want to be....

A single country model makes no sense in terms of ecomonies of scale.

+1

The details of the deal would be interesting. Still, if the decision has gone the other way that would have been very bad news indeed

For those looking at national in-sourcing of components etc, can I recommend reading up on Hillman/Rootes at Linwood. Particularly the bits about a workforce that knew how to build ships not cars and the distance from the component expertise.
Given it's even a car example of political interference in industry, then Brexit and messing around with Nissan seems to echo very well.

Singapore have done this very successfully by balancing the flow of skilled migrants with an increase in training in key skills in their universities / technical colleges.

Human rights in Singapore. The government in Singapore has broad powers to limit citizens' rights and to inhibit political opposition. In 2015, Singapore was ranked 153rd out of 175 nations by Reporters Without Borders in the Worldwide Press Freedom Index.

Dictatorships can always do things democracies can't. Not always bad things of course.

Is that why the Brexiters keep trying to crush dissent - to build a glorious future?

We live in a globalised, joined up, world now...imo, any thoughts about 'doing things on our own' is contradictory to common sense ANd the way the rest of the world is operating...personally it just feels like people forcing the issue and disbanding all common sense...

Is that why the Brexiters keep trying to crush dissent - to build a glorious future?

Quiet you traitor!!!

That's not news Binners. Everyone knows about my traitorous nature already.

Do Nissan make all their models in the UK? If not… have another think.

No but they do have rather a clever plant in Sunderland which has been designed to build 5 different platforms of vehicle on the same production line at the same time. It's one of a very small number of plants in the world that can do this - possibly the only one. I'm not sure how many platforms Nissan has at present but it's probably not much more than 5.

So brexit means we'll all have to drive Nissan Qashqais?

Yes... and you'll be force fed tea and scones

At least we will be able to hoover up the crumbs properly.

We're not buying that man's product - he's a Brexiter.

No but they do have rather a clever plant in Sunderland which has been designed to build 5 different platforms of vehicle on the same production line at the same time. It's one of a very small number of plants in the world that can do this - possibly the only one. I'm not sure how many platforms Nissan has at present but it's probably not much more than 5.

So, that is long way of saying that no, they don't build all their models in the UK, but they could perhaps build several models, despite the insane costs of stopping specialisation at their plants (all components for many different models shipping to the NE of England etc, rather than just, or more likely as well as, to the plant currently earmarked for each model) just to cope with British political madness.

I'm putting money on tax breaks rather than some kind of unlikely move to producing all UK market cars in the UK.

and where do Nissan build there engines? For example Skoda build engines for the entire VAG group. Rolls Royce use German engines i believe, BMW Minis again use a engine shared across the group.

The obvious next step is to ask what GM will get to keep Astras at Ellesmere port.

I guess Boris could promise them 350M a week

Oooh, good point RichC. Do you think the Brexy-boys will be expected to keep their promises to car manufacturers?

So Nissan demonstrates simply that we have increased the cost to the UK of having production based here. The only difference is that (presumably) we have given Nissan a tax break, cost advantage, or some other form of compensation to do what they were already going to do.

Baldrick that is brilliant!

Is the qashqai the new People's Car?

Not if they lied to Nissan THM and they only admit it after Nissan are inextricably committed.

Clever, see.

Doesn't just work on voters.

Perhaps

Good to finally see some positive news. The concessions made would indicate support for free movement and industries other than services, which is a positive sign.

I think it's great news that the govt has done a deal with Nissan. I'm saddened that they don't have the confidence to be transparent about it. I mean, shit! There's £350m a week to blow on keeping business here to make Brexit a success.
Rock on! 🙄
Anyone want to wish me happy birthday for yesterday?

Hah. ^ +1

Nissan - quite complicated. The "deal" they have been offered may have been very cheap or even free. Depends on a lot of things.

If they buy parts, engines etc from Europe and then sell the car in Europe there is no additional cost (unless Europe is daft enough to insist on duplicate in/out tariffs which would hurt them). Labour and premises costs, electricity etc all in £ and with £ lower all that is a cost saving for export

So the net costs (or benefits) is quite complex. As it is a Nissan built in the UK until 2019 is currently cheaper to produce than it was wrt to selling it outside the UK. How these extra profits will factor in I don't know

@captain happy birthday and 🙂 will you be keeping the talky to let them know when the £350m is used up (its a moving target as payment is rising 😉 ) ?

jambalaya -
Nissan - quite complicated. The "deal" they have been offered may have been very cheap or even free. Depends on a lot of things.

Will you be keeping the talky to let them know when the £350m is used up (its a moving target as payment is rising  ) ?

Nissan - quite complicated. The "deal" they have been offered may have been very cheap or even free. Depends on a lot of things.

Nissan - quite complicated. The "deal" they have been offered may have been very cheap or even free. Depends on a lot of things.

Nissan gave some clear indications of what they'd require. Free trade and free movement of people pretty central to their expectations. I'm beginning to see hard brexit as a necessary bluff.

Previous governments, of which May was of course a big part, seemed to have had the strategy of announcing something more extreme or radical, testing the reaction for a few days (aka listening to the uproar) and then rolling it back to something more moderate.

So they get what they originally wanted but their opponents feel better as they a) feel relieved because the moderate policy looks good compared to the extreme one and b) feel happier because they think they've exerted some influence over the govt.

That approach would make sense here too, tbh.

Nissan: Free movement of people ? Never heard that. Why on earth would Nissan be interested in free movement of people let alone it be a requirement ? They have a small skilled workforce, easily enough UK candidates and skilled people would get a visa.

My point on the deal is that the cost could be zero and certainly nothing for 2 years, Nissan will be making more profit at this fx rate till 2019. This deal would be consistent with a hard Brexit. Such a deal would not be possible if we where in the Single Market - it would be seen as a subsidy ?

Does anyone know how BMW manages ? All it's X5 models are built in the US. Do they just eat the EU tarif and cross subsidies ?