Stellantis last week put a gun on the table and threatened to take out its UK manufacturing facilities if the government didn’t change its position on the ZEV mandate.
Publicly threatening to axe UK manufacturing has become the preferred negotiating tactic by global car makers that, for whatever reason, feel they aren’t being heard through the normal back channels.
In recent years, Nissan, BMW, Toyota, Stellantis and Ford have all warned they will leave the country if the government can’t provide the right environment for competitive vehicle and parts manufacturing.
The biggest recent fear was the effect of Brexit. However, Stellantis has now raised its gun on a new target: UK government policy and the requirement to sell a growing percentage of electric vehicles.
Stellantis, which makes vans in two British plants, is worried that the legislation is running far ahead of consumer demand. “If demand does not follow the offer, then we will be forced to take decisions. For sure, there will be consequences on the production set-up,” Maria Grazia Davino, head of Stellantis in the UK, told journalists at an event last week staged by automotive industry body the SMMT.
The question for a future government is just how realistic this threat is, given the company’s recent investment.
Stellantis last year restarted production at its Ellesmere Port facility after a £100 million makeover to switch production from the Astra to electric compact vans for its Peugeot, Citroën and Vauxhall brands. Meanwhile, it has also promised to build electric versions of its mid-size van range at its Luton plant from next year.
“I do think it's a credible threat,” David Bailey, professor of business economics at the Birmingham Business School, told Autocar. “Stellantis is unfortunately a footloose multinational with considerable capacity across Europe. They can switch production if they want to.”
Stellantis was using just 56% of its plant capacity across Europe last year, figures from GlobalData show. That’s bad for efficiency but it does make for a very effective negotiating tool, one that Stellantis CEO Carlos Tavares has shown he is not afraid to use, for example in Italy.
The biggest threat to Luton is Stellantis’s plan to start building the same K0 van range – including the Vauxhall/Opel Vivaro – from 2025 at a refitted plant in Turkey run in partnership with Koc Holdings.
Koc is also partnered Ford in Turkey to build the Transit mid-size and large vans, a highly profitable operation.
Competing with Ellesmere Port, meanwhile, is Stellantis’s Mangualde plant in Portugal, which from 2025 will start producing the same Citroën ë-Berlingo, Peugeot e-Partner, Opel Combo-e and Fiat e-Doblo as the facility in north-west England.
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