Why will JLR build a plant in Slovakia?
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Why will JLR build a plant in Slovakia?
- The JLR group (Jaguar Land Rover), a subsidiary of Indian group Tata Motors, has signed an agreement with Slovakia on the implementation of a new assembly plant in the country. Jaguar Land Rover had already signed in August 2015 a letter of intent with the Slovak Government for the construction of a new production site in Nitra. Why would this premium manufacturer implant itself in Slovakia, when it is clearly associated as a British product?
- First of all, let us recall that the JLR group currently has three factories in Britain (Solihull, Halewood and Castle Bromwich) with a total capacity of 490 000 vehicles per year. However, 2015 ended on a volume of 495 000 vehicles produced in all three factories. The JLR group needs to open additional capacities, especially because the manufacturer will launch a new Discovery in 2016 and above all a new Defender in 2018.
- The Land Rover Defender is currently finishing its career after 68 years of production and two million copies produced. The future Defender should become a substitute to a compact SUV, a competitor to the Jeep Renegade that is leading on a growing segment. To be profitable, the future compact model by JLR will be marketed a reasonable price which is why it should be manufactured in a country with lower labor costs than in England, and in these circumstances the selection of Slovakia is a wise choice . The ability of the future Nitra plant could be of 200 000 vehicles a year.
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BREXIT 1/4: What would happen if Britain left the EU?
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BREXIT 1/4: What would happen if Britain left the EU?
- In 2015, Britain produced 1.66 million vehicles (PC + LCV) of which almost 50% were exported to the EU.
- The domestic market accounted for 3.0 million vehicles of which 80% came from the EU.
- The flow between Britain and Europe is therefore:
- 2 400 000 vehicles imported into Britain from the EU, i.e. 13% of EU production.
- 800 000 vehicles exported from Britain to the EU (around 50% of UK production).
- The exit of Britain from the EU (BREXIT), could have a strong impact on the overall economy of the country but also on the automotive industry:
- Production plants located in the United Kingdom which export mainly to the EU
- On the overall internal market which mainly imports vehicles from the EU and therefore on European production.
- If Britain was to leave the EU, various factors are to be taken into account and may have a positive or negative impact for either of the players. Among these factors we can include:
- The return of customs barriers and taxes on imports and export either in the EU or in Britain
- The devaluation or valuation of the exchange rate of the pound and the euro.
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Global automotive production in 2016
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Global automotive production in 2016
- After a growth in global automotive production in 2015 recorded as the lowest since 2010 (+ 1.5%), global automotive production will grow by 2% in 2016.
- The weak growth in the global automotive market in 2015 was mainly due to a slower growth of the Chinese market (+ 4.3%), and the decline of several large markets like Russia (-35.7%) , Brazil (-26.6%), Japan (-9.3%) and Argentina (-5.6%).
- Countries that will do better than in 2015:
In 2016, China growth is expected to be slightly stronger than in 2015 (continuation of tax incentives on small cars), Russia should see a smaller decline than in 2015 (the recovery of this market is now expected in 2017), thanks to new measures to help in the purchase of a new car introduced by the Government. Similarly, Japan, Brazil and Argentina should see a smaller decline than in 2015 (catching up effect).
- Countries that do less well than in 2015:
In 2016, Europe is expected to experience slower growth than in 2015 (growth was exceptionally high). Similarly, the USA and India are expected to experience slower growth than in 2015.
- The ranking of the top eight global manufacturers in 2016 is expected to remain the same as in 2015.
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The top 30 vehicles producing countries in 2015
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The top 30 vehicles producing countries in 2015
- Inovev has calculated vehicle production volumes (PC + LCV) of each producing country in 2015. The total of all countries shows an increase in the production volume of around 1.5% which is the lowest growth since 2010.
- China (+ 4.5%) remains the largest producer, despite a slowdown in the growth of its market, ahead of the USA (+ 4.2%), Japan (-5.0%), Germany ( + 0.7%), South Korea (+ 1.1%), India (+ 7.7%) and Mexico (7.1%), which hold the same positions in 2014.
- Among these first seven producing countries, Japan decreased because of an internal market in sharp decline, Germany stagnated due to a gradual transfer of models towards production in China (BMW, Mercedes), in the US (Mercedes) and in Poland (Opel).
- Spain is progressing thanks to the arrival on its territory of the Opel Mokka, Renault Kadjar, Ford Mondeo, Ford Galaxy and Ford S-Max which boosted its production (+ 19.7%). Spain has also benefited from the success of the Renault Captur and the new Opel Corsa.
- Canada (-6.5%) continues to lose production volume (transferred to the USA and Mexico), Brazil (-21.9%) lost more volume because of the fall of the domestic market and its exports to Argentina, whose market volume also reduced.
- France (+ 6.5%) benefited from offshoring (Renault Trafic), while Russia (-22.1%) suffered from the fall of the domestic market. The Czech Republic enjoys the success of the new Toyota Aygo, Peugeot 108 and Citroen C1. Italy (+ 35.0%) benefited from the implantation of the Fiat 500X and Jeep Renegade on its territory. Hungary benefited from the success of the Mercedes CLA and Suzuki Vitara.
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Fiat will have three pick-up in various segments in 2016
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Fiat will have three pick-up in various segments in 2016
- Fiat believes in the development of the compact pickup segment in South America and Europe, like Renault and Mercedes it will launch in 2016 new models in this category.
- To be present in both markets, Fiat's strategy is to offer models suited to both their specificities.
- For South America, Fiat sells the Strada (already known since 2013), derived from the latest generation of the Palio. Available in short or long variants, this model is produced in the Fiat plant in Brazil, located in Betim. In 2014, 167 000 units were manufactured there. In 2015, due to the fall of the Brazilian market, production reached 103 000 units.
- The second pickup which is a little bigger, intended both South America and Europe, began production in October 2015, on the Jeep plant of Goiana, again in Brazil. Namely the Toro, a model originating from the compact SUV Jeep Renegade which is built on this site since February 2015. The Toro is in direct competition with the Renault Duster Oroch that has just started its career in Brazil (2000 sales per month).
- Exclusively for Europe, Fiat will offer the Fullback, a pick-up which is a little bigger and is due to be made from the second quarter of 2016 in Thailand in the Mitsubishi plant (it is in fact based on the Mitsubishi L200 pick-up) and compete with "midsize" pick-ups such as the Toyota Hilux, Nissan Navara, Mitsubishi L200, Isuzu D-Max, Ford Ranger and the future Renault and Mercedes based on the Navara.
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