UK cars: opportunity knocks as Vauxhall falls to the French
What a day for hard Brexit fans, said Alistair Osborne in The Times. According to Peugeot boss Carlos Tavares – who has just pulled off a bargain s2. 2bn deal to buy Vauxhall and Opel from General Motors – it’s an “opportunity”. “Brexit is interesting because nobody knows how it will unfold,” he said this week, in a message of reassurance to thousands of workers at Vauxhall plants in Luton and Ellesmere Port. A hard Brexit could mean even more investment in Britain’s car industry if a “pound cost structure” prompts a resurgence of the local supply chain. What a “seductive line” for the PM, Theresa May. Should she fall for it?
There are good reasons to consider Tavares’ “appeal for the UK government to fund a rearming of the UK supplier base”, said Nils Pratley in The Guardian. At present, Ellesmere Port imports 75% of its parts – there’s “an attractive opening there for UK firms” were the ratio to change. Still, caution is required. “Politics is never far away in the car business”, and embracing Tavares’ strategy “may require the Government to push the market harder and faster than it would move on its own”. In a timely reminder this week, the Institute of Directors warned of the “bad outcomes” we’ve seen in the past when governments have favoured certain industries with special treatment.
Tavares has a reputation to maintain, said Lex in the FT. According to one fan, his turnaround of Peugeot proves “he can split the atom while mapping the genome and walking on the Moon”. Production of the Astra and Vivaro in the UK are guaranteed until 2021 and 2025 respectively, but Tavares hopes to return Vauxhall to profit through efficiency measures. Can he really succeed where General Motors failed? To pull it off, “Carlos the Conquistador” is going to need “plenty of grit”.