By 2015, something unusual will happen at the large car plant in Ellesmere Port, near Liverpool: the factory will begin making vehicles for which British drivers are the target market.
Operated by General Motors of the US under its Vauxhall brand, it is one of eight large car plants in the UK, all of which are owned by six non-British companies including three from Japan and one each from India and Germany.
As part of a £125m development project, the Ellesmere Port factory is due to manufacture a new version of the company’s bestselling Astra car for which there is a big demand in the UK but where most of this is met by bringing in vehicles made in GM sites in Poland or Germany.
According to GM officials, the new car could increase the proportion of vehicles made at Ellesmere Port that are sold to UK-based customers to 50-60 per cent, from the current 20 per cent.
This shift in emphasis goes against the trend in much of the rest of the UK car industry where exports as a proportion of total production have been rising for some time.
Last year, according to data from the Society of Motor Manufacturers and Traders, 82 per cent of all cars made in Britain ended up being shipped overseas –with the export total of 1.2m vehicles being the highest ever.
The strong export performance has been one factor behind the UK’s improving trade balance on cars. Next month, government data are expected to show that the trade deficit on cars narrowed from £1bn in 2011 to about £150m last year – which would make the deficit the smallest since 1975. The last time the UK turned in a trade surplus on cars was in 1972.
The good performance of the UK car industry is in contrast to the lacklustre state of much of the rest of the economy. It also stands out against the difficulties of many car producers based in continental Europe where demand has fallen heavily since the financial crisis.
With thanks to the FT for this article.