(Photo from : Nissan Insider )
With all the negativity at the moment a good bit of optimism is the only way forward to help promote our consumer confidence!
It is not all doom and gloom, the latest GDP figures according to the Office of National Statistics show that UK has surpassed expectations with 0.5% growth in the 3rd quarter. In addition to this the Bank of England have not reduced interest rates further from the current 0.25%, contrary to prior expectations.
Nissan the most efficient car factory in Europe- capable of producing 115 cars per hour- has announced that they will be remaining in the UK, which gives job security to the previously 42,000 workers who rely on the Japanese car manufacturer for employment directly and indirectly. They have also pledged to produce the next two cars in their product line the Qashqai and X-Trail at Sunderland, which will provide more employment opportunities to the UK labour market. This will give a huge boost to the North-East, as loosing such an influential multi-national enterprise would have has serious economic repercussions.
The hope is that Nissan’s decision to remain will give reassurance to other MNE’s in the UK that it is still worthwhile being in the country; especially for the likes of Vauxhall and Toyota. It also has positive implications for the proposed international manufacturing park, which is being built in the North and also the New Wear crossing plan, which would benefit Nissan by connecting manufacturing firms to Sunderland’s port. However, many companies in the Nissan supply chain would still be significantly affected by trade tariffs as they are export-focused and import a lot of raw material from Europe. The UK has a strong position in the auto-industry being a net importer of cars, as such it is in the interest of EU countries such as Germany for trade barriers to be limited/alleviated. Manufactures are keen on the UK due to the welcoming government and skilled workforce.
Nissan have not been the only one to commit to future investment in the UK. AXA SA’s real estate unit have stated that they will continue with their proposed construction of the tallest tower in London
There is a 10% tariff for imported cars into the EU and the UK government has reassured Nissan that the car manufacturer will remain competitive, how can this be achieved considering export subsidies are forbidden. Nissan have also benefited from the weakened pound but this is far from a long-term benefit of remaining in the UK. However the depreciation of the pound has increased export demands.
However, the benefits are provisional and the current GDP growth rate was significantly driven by the service sector and with the large service institutions having their finger primed over the ‘relocate’ button, the long-term is a different matter. Also, there are a few instances of investment commitments, however there are numerous cases of companies withholding investment due to the uncertainty of Brexit. To save our manufacturing sector there is a need for the government to give sector assurances rather than individual cases- which as a course could lead to further entrenchment- it is essential we maintain the sector to maintain highly skilled and decently paid jobs.
Let me diverge and finish on a positive note- despite our foreign holidays costing more, it is extremely positive for our tourism industry. This is prominent in Northern Ireland, been a huge beneficiary from Republic of Ireland tourists visiting with their Euros and giving a much welcome boost to businesses in the bordering towns.
By Kieran Savage