Regional economist, Professor Alex de Ruyter based at Birmingham City University, has welcomed an announcement from automotive giant Jaguar Land Rover that production shifts have been restored at its Solihull and Halewood plants, but says ‘the overall outlook remains cloudy’ for car manufacturers.
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Professor Alex de Ruyter said, “This is positive news from a strategically important employer in the region. The recovery in Chinese demand is particularly welcome and indicates that areas where Covid-19 has been effectively suppressed are witnessing relatively robust economic recoveries.
“Sadly, the overall outlook still remains notably cloudy. Domestic demand is notably weak at present and production remains well below its peak. A torrid 2020 has followed a 2019 that itself saw the weakest UK vehicle production for some years, and the sector has a number of significant strategic challenges to weather.
“In the immediate term, Brexit will be a key challenge. In terms of the European market, avoiding tariffs will be crucial. However, all manufacturers are likely to need to come to terms with a plethora of additional paperwork whether or not a zero-tariff agreement is eventually made, particularly in terms of demonstration of sufficient “local content” when complying with rules of origin.
“For the likes of JLR, which export extensively to large international markets like the US and China, ensuring the continued smooth functioning of supply chains will be absolutely crucial.”
The report, Brexit and UK Auto, Rail and Aerospace: Understanding Logistics and Supply Chain, co-authored by Professor de Ruyter, was published in January 2020 and is available to download here