There have been two important announcements this week about the UK car industry: one bad, one exciting. This is important for us here in Wyre Forest as we have many companies employing thousands of people in the automotive supply chain.
The bad news is the announcement from Nissan, who has changed its mind about the X Trail production, leading to a closure of the planned production line in Sunderland and switching it to Japan. This might have a little to do with Brexit uncertainty, but has far more to do with uncertainty about our policy towards diesel engine cars. This confused position affects local manufacturer Jaguar Land Rover (JLR) and so has important implications for us in Wyre Forest. Indeed, the position on diesel engines may have a profound effect on our second-hand car market. It is interesting, looking around second hand car lots at car salerooms that there are quite a lot of diesel cars for sale and their second-hand prices seem quite high. Car leasing companies are compelled, under their contracts, to buy back cars at a predetermined price. Since the contracts were taken out some years back, the law has changed over diesel cars so leasing companies now own cars they have bought at prices higher than their true value. They are trying to sell them, but not easily so there is a potential financial problem brewing in the car lease market, and the second-hand market. Add to that the implications of the X Trail and other diesel cars and there is a bit of a perfect storm brewing.
However, the good news is that we are embracing new technology. The government has indicated that the first long distance driverless journey will happen before the end of this year. Changing our legislation to allow further technological advances, combined with the government investments in modern electric engines and battery technology is making the UK a centre for excellence for modern automotive technology. There is a lot of change happening in this area and it is vital that we not only keep up with the change, but lead it. By doing that, our automotive sector and our wider economy is well prepared to adjust for the changes. For example, thousands of Uber drivers will need to know what they will do once taxis and minicabs are driverless. Exciting opportunities, but not without costs.
