Auto blog

The UK votes for Brexit and it will impact automakers

It's the first morning after the United Kingdom voted for what's become known as Brexit – that is, to leave the European Union and its tariff-free internal market. Now begins a two-year process in which the UK will have to negotiate with the rest of the EU trading bloc, which is its largest export market, about many things. One of them may be tariffs, and that could severely impact any automaker that builds cars in the UK. This doesn't just mean companies that you think of as British, like Mini and Jaguar. Both of those automakers are owned by foreign companies, incidentally. Mini and Rolls-Royce are owned by BMW, Jaguar and Land Rover by Tata Motors of India, and Bentley by the VW Group. Many other automakers produce cars in the UK for sale within that country and also export to the EU. Tariffs could damage the profits of each of these companies, and perhaps cause them to shift manufacturing out of the UK, significantly damaging the country's resurgent manufacturing industry. Autonews Europe dug up some interesting numbers on that last point. Nissan, the country's second-largest auto producer, builds 475k or so cars in the UK but the vast majority are sent abroad. Toyota built 190k cars last year in Britain, of which 75 percent went to the EU and just 10 percent were sold in the country. Investors are skittish at the news. The value of the pound sterling has plummeted by 8 percent as of this writing, at one point yesterday reaching levels not seen since 1985. Shares at Tata Motors, which counts Jaguar and Land Rover as bright jewels in its portfolio, were off by nearly 12 percent according to Autonews Europe. So what happens next? No one's terribly sure, although the feeling seems to be that the jilted EU will impost tariffs of up to 10 percent on UK exports. It's likely that the UK will reciprocate, and thus it'll be more expensive to buy a European-made car in the UK. Both situations will likely negatively affect the country, as both production of new cars and sales to UK consumers will both fall. Evercore Automotive Research figures the combined damage will be roughly $9b in lost profits to automakers, and an as-of-yet unquantified impact on auto production jobs. Perhaps the EU's leaders in Brussels will be in a better mood in two years, and the process won't devolve into a trade war. In the immediate wake of the Brexit vote, though, the mood is grim, the EU leadership is angry, and investors are spooked.

Nissan's 'No Charge to Charge' is what incentives look like in the EV age [UPDATE]

Nissan knows that offering free charging can increase Leaf sales, so it only makes sense for them to expand the "No Charge to Charge" program. And that's exactly what happened yesterday. As previewed during the New York Auto Show, No Charge To Charge gives new Leaf buyers free charging at participating public charging stations – which is pretty much any public station – for two years. That's the kind of thing that simplifies the EV buying process, which can move units, Brendan Jones, director of Nissan EV sales and infrastructure, told AutoblogGreen. "There is an expectation that we'll get a sales increase out of this," Jones said. "All the dealer has to say is that we have one card that accesses all chargers and we have a promotion where you can get free charging. The more complexity we reduce, the more sales we get." "The more complexity we reduce, the more sales we get." – Nissan's Brendan Jones That all-access angle is important for the broader EV market, Jones said, calling the program, "The first valid step towards interoperability." Jones said there will be more surprise announcements soon. "The infrastructure companies really came together to support Nissan on this," he said, but added that, "What's good for the industry and EVs in general is good for Nissan." "Leaf customers are not shy about their ability to provide constructive criticism," Jones said, " and interoperability has always been a big concern." Now that many of the early adopters drive an EV, the next target audience are the people who are telling EV companies to "Make this easy for me and I will adopt," Jones said. "[Interoperability] is a necessity for the industry now. We know the experience is great once they drive it. This just takes away a barrier, that confusion at the dealership." And, in some areas in the US, No Charge To Charge is now live. There are 2,600 public stations (200 of them fast chargers) in the initial 10 markets, Nissan says. Those include: San Francisco, Sacramento, San Diego, Seattle, Portland (OR), Nashville, Phoenix, Dallas-Fort Worth, Houston and Washington, DC. Nissan hasn't announced where the next 15 markets will be, but we know that they will likely be wherever the Leaf is selling well and there are a fair number of DC fast chargers. As we reported in April, each charging session in the No Charge To Charge program is limited to 30 minutes if you're plugged into a CHAdeMO fast charge station and to an hour at a Level 2 station.

Japanese automakers ramping production for renewed American sales

The 2011 earthquake and tsunami that struck Japan took quite the toll on the automotive industry in that nation. Not content to lean on that tragedy as excuse for slagging sales, the Japanese automakers are planning on a major production expansion in North America. The aim is to reclaim the market share lost from the Tsunami-based dip, and overcome a dollar/yen exchange rate that makes exporting to America unprofitable.
Following the Tsunami, Japanese automakers ramped up production in their North American facilities to compensate, but according to Automotive News, Nissan, Honda and others have all reported plans for still-further increased production in the year ahead. As part of this ramp-up, Mazda will open a facility in Salamnca, Mexico before March of 2014. Part of that increase in output is 50,000 units of a Toyota-badged compact car, which Mazda will produce.
Other Mexican production facilities opening include a Honda plant, which will open in Spring 2014 in Celaya, and a Nissan plant, set to open later this year in Aguascalientes. Nissan also said that it will need another plant in North America within the next five years. According to Nissan Boss Carlos Ghosn, the company aims to raise its stake in the US market from 8 percent to 10, and adding production will help achieve that goal. Even Mitsubishi is aiming to boost production at its Normal, Illinois plant. Production of the Outlander Sport is currently at 50,000, which Mitsubishi wants to raise to 70,000.