Rule Britannia! Er, not quite . . .
MANY LRM readers have joined the chorus of condemnation following JLR’S formal announcement that the New Defender is to be built alongside the Discovery at the company’s factory at Nitra in Slovakia, although this was not totally unexpected news. I have to say that I also think it is a shame that the New Defender will not be built at Solihull. It feels like the end of an era somehow.
It’s easy to see why JLR made the decision, though. On the one hand, I’m sure it’s important to them to have a plant in the EU, although since they were planning it long before the referendum they can’t blame it on Brexit. But the real reason is, of course, to do with money. The European Commission produces a league table of hourly labour costs and a quick look at this shows that in Slovakia the average is around 11.6 Euro, while in the UK it is more than double that at 27.4 Euro. So there are big savings to be had, although that doesn’t explain how Germany and France are both able to build cars very successfully on their home turf when their hourly rates are 34.6 and 35.8 respectively.
It’s also worth knowing that when JLR completed their assessment regarding the location of their new factory they ended up with two alternatives: one was in Slovakia, and the other was in Mexico. The clincher was the offer of a 125m Euro grant by the Slovakian government, which the EU Competition Commissioner decided was an acceptable piece of state-aided and taxpayer-funded support given that it would lead to the creation of up to 3000 jobs in Slovakia that would otherwise have been lost to Mexico.
I doubt that building the Discovery and the New Defender in Slovakia means the final purchase price to the buyer will be cheaper as a result of the lower employment costs, though. It just means that the profit margin for the company will be higher.
The Slovakian plant is not JLR’S first offshore factory, of course, because it already has its Chinese joint venture and its plant in Brazil, both of which build the Evoque and the Discovery Sport, its facility in India that builds the Evoque, Velar and the Discovery Sport, and a contract with Magna to build vehicles in Austria, although at the moment this is restricted to Jaguar models only.
Some commentators have suggested that JLR now has too much manufacturing capacity across the world given the massive slump in new vehicle sales that it has experienced over the past 18 months, and it has been suggested that this over
capacity could contribute to even more of its product range being built overseas. Naturally enough, the company takes every opportunity to stress its commitment to the UK and its recent opening of a new electric drive facility at Hams Hall, as well as promises of further investment at Castle Bromwich and Solihull, seem to reinforce this.
But it seems that it will be the top-of-the-range models with complex electric propulsion that will be built here, and it wouldn’t surprise me if there is an increase in offshore manufacturing over time with the UK becoming more of a worldwide headquarters and engineering and design centre for the company. Such is globalisation.
Despite our emotional discomfort with the New Defender being built in Slovakia rather than Solihull, I guess we all need to focus on the importance of JLR’S financial recovery, which I’m sure is directly connected to the success of the New Defender. I hope it is a success, and I am looking forward to driving it in due course. My concern remains that it will be too dependent on vast amounts of on-board electrickery and I don’t really care how accomplished it is, both on-road and off-road, if it turns into a large paperweight when the gremlins strike.
Modern vehicles are fine when they’re new or a few years old. I have quite a few friends who regularly shell out the readies on brand-new Land Rovers, but they move them on before the warranty expires. If I ever fulfil my desire to repeat my 1993 traverse of Iceland I’ll happily do it in a new, or new-ish, modern Land Rover. But I wouldn’t do it in my eight-year old L322 Range Rover unless I had a support crew following me in a Unimog truck with half a ton of electrickery spares in the back! Come to think of it, if I were doing it again I’d take something I’d be confident of fixing if anything went wrong, like my 1990 Range Rover or my 1997 ‘Real Defender.’
Now there’s a thought – I don’t really like calling the New Defender the ‘New Defender’ and I don’t know whether JLR is going to call it that or something else, like Defender II. So how about ‘Real Defender’ for the vehicles built from the introduction of the name in 1990 right through to the end of production in 2016? Whatever JLR decides to call the new vehicle, I’m going to call my 1997 300Tdi a Real Defender.
Meanwhile, I wonder what JLR is going to do with the ‘Home of the Legend’ visitor centre at Solihull? Is now the time to make your advance booking for the ‘Nitra: Home of the Legend’ factory tour? There are plenty of cheap flights to Bratislava.
“Despite our discomfort with the new Defender being built in Slovakia, we need to focus on JLR’S financial recovery”