The U.K Governments decision to ban the sale of new petrol & diesel cars by 2030 presents some real challenges for the UK Automotive industry. A development lifecycle of 5-7 years is not unusual for a brand new model & when we are looking at a whole different powertrain & chassis with the consequent implications for production assembly then we are talking major developments.
JLR spent over $1 Billion developing its 2014 Engine Plant for Diesel & Petrol Engines, this gives some indication of the huge resource requirements for Battery powered vehicles.
There is a lot of debate as to whether Electric Vehicles actually produce less CO2 than their ICE (Internal Combustion Engine) counterparts but this report from ICCT organisation clearly debunks this.
There is some parallel with the elimination of leaded petrol, responsible for the death of over 5000 adults per year & countless examples of brain damage to children; it took over 12 years from unleaded petrol being available to a European Directive in 2000 before it was eventually banned.
Interestingly the Government announcement makes no mention of exporting ICE vehicles; only sales in the U.K. As we currently export 80% of all UK manufactured cars (admittedly 55% to the Eu) there is a little bit of wriggle room for Manufacturers to continue making ICE cars in lower volumes beyond 2030. There are many part of the World where Electric Vehicles will not prevail for many years to come but in urban conurbations in the ‘developed’ world their ascendancy is without doubt.
This will result in huge engineering & change management opportunities in the ever evolving automotive sector.
There will be much debate over the coming decade about the pro’s & cons of electric cars but there is no doubt about it, after a century of production the Internal Combustion Engine is heading for the breakers yard.
JLR also has manufacturing facilities in Brazil, China & India. Like all global automotive players its manufacturing sites are scattered across the globe although before the Tata takeover they were all in the UK but that was before the Indian conglomerate invested $billions into the company & transformed it from a niche brand to one, although small on a Global scale, has more than doubled its workforce in the UK to over 40,000 people as well as expanding the range of products enormously. Without this massive investment Jaguar Land Rover would not exist in its current form.
The move does however highlight something which ardent Brexiteers seem to be unable to grasp. All these large global businesses have no overriding loyalty to any particular country & are in the business of generating revenue not pandering to some quaint notions of nationality, so they adapt their business to suit the geo-political conditions of the times.
One must ponder then what is the benefit of introducing additional barriers to making business easier. Additional bureaucracy & costs in the form of tariffs & customs charges when parts are arriving from all over the globe just doesn’t make business sense. If Britain leaves the customs union it will cause a massive headache for companies like JLR who import & export millions of components & parts every year. Longer term this will give them greater incentive to set up manufacturing sites inside the European Economic entity.
Jaguar XF - a great example of new product development success
This weekend jaguar Land Rover announced that it had reversed its threat to close one of its U.K plants and, even better, said that it would create thousands of new jobs including 1500 at it’s plant at Halewood on Merseyside.
Barely 2 years after fears that Jaguar Land Rover might fold Q2 profits of £233 million have boosted confidence in the future of the luxury car market.
A large part of this success is due to innovative new product development and in particular the success of the new XF range.
According to data from the European Automobile Manufacturers’ Association (ACEA), the number of Jaguar’s being registered in Western Europe in April rose 70.3 per cent year-on-year – way above any other volume manufacturer.
Jaguar have addressed one of the main concerns amongst luxury car consumers – the trade off between performance and fuel consumption. The XF does a staggering 0 – 60 m.p.h in 5.3 seconds and still manages a meagre 47 m.p.g.
Jaguar have demonstrated how investment in innovation and new product development can bring success even in the most difficult of economic climates.