Fleet News

Euro entry is 'vital' for UK car production

UK fleets with a 'Buy British' company car policy could find their choice lists extremely limited within the next few years as leading manufacturers threaten to take their assembly plants overseas unless the UK adopts the Euro.

Patriotic fleet decision-makers already have to accept that car makers like Nissan, Honda, Toyota and Peugeot represent the face of the UK motor industry as much as traditional fleet favourites, Ford, Vauxhall and MG Rover.

But now Ford, Nissan and Peugeot have started to threaten that future investment in this country depends on the UK entering the single currency.

At a private briefing, Roger Putnam, chairman of Ford of Britain, told Fleet NewsNet: 'There is no doubt that doing business in Britain for any manufacturer is extremely difficult, not just because of the absolute strength of the Pound versus the Euro and Dollar, but also because of the volatility. A 5% swing in exchange rates over just three months is very serious when you are aiming at a 5% margin.'

He reiterated Ford's commitment to UK manufacturing, highlighting major investment by Jaguar at Halewood, by Land Rover at Castle Bromwich and by Ford in transforming Dagenham into its global diesel engine headquarters.

But he added: 'Ford has a very clear position that the UK needs to get a stronger allegiance with the Euro for commercial reasons. We need to choose the right moment in the cycle and freeze the currency volatility.'

Referring to the old government and industry mantra of 'export or die', Putnam said it was more a question of 'export and die' in current conditions, although he described recent comments from Nissan and Peugeot regarding their long-term presence in the UK as 'sabre rattling' in a bid to pressure the Government towards Euro entry.

At the Paris Motor Show, the chief executives of PSA Peugeot Citroen, Jean-Martin Folz, and Nissan, Carlos Ghosn, intimated the future of car production in Britain was in doubt without entry to the Euro.

Folz said the fate of the Ryton plant – which makes the Peugeot 206 – would be decided by the end of the year, following meetings with trade and industry secretary Patricia Hewitt.

Ghosn hinted that next time a decision on where to build a new model was made, Nissan's Sunderland plant would lose out if the UK had not adopted the Euro. Last year, its position as the most efficient in Europe tilted the new Micra its way, despite exchange rate concerns.

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