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UK car industry’s rebound driven by Japanese automakers

Jaguar, Rolls Royce, Land Rover, Mini, MG. The pantheon of British automakers has a storied history, but it is not exactly populated with big-volume world-beaters.

And its recent history has been darkened by years of decline in which many of these household brand names were bought and sold by overseas rivals betting they could engineer a turnaround.

However, Britain’s long beleaguered auto industry is staging a big comeback. And it’s mostly due to some not-so English names: Nissan, Toyota and Honda.

Indeed, local production is forecast to hit an all-time high of 2.07 million vehicles in 2017. That exceeds the record 1.92 million from 1972 and is way up from just 999,460 in 2009. Last year, the UK produced more cars than France for the first time in decades: 1.51 million to France’s 1.46 million.

Michael Hawes, CEO of the UK industry association, the Society of Motor Manufacturers and Traders, presented the 2017 outlook at this month’s Global Automotive Forum in Wuhan, China.

The resurgence isn’t thanks to homegrown brands. The engine for Britain’s auto boom is actually the Japanese.

Nissan, Honda and Toyota each have plants there and account more than half the country’s output. Nissan, the country’s top manufacturer, churned out half-a-million vehicles last year alone. Toyota was No. 3 in output and Honda was No. 5.

The second biggest was Land Rover, while Mini came in fourth.

It’s difficult to overstate the Japanese impact.

When British car output was at its peak in 1972, there were no Japanese plants in the country at all. Now, output is nearing record levels, and the Japanese account for half that volume.

“The change that happened in the 1980s was that the UK became very much more open. You saw companies like Honda, like Nissan like Toyota coming in,” Hawes said. “They brought with them some new ideas, some new ways of working, higher degrees of quality, different production processes.”

Britain’s modern auto industry is a good fit for the Japanese in one big way – it is heavily export dependent. In fact, last year, 77 percent of all UK-built cars were shipped overseas.

“If you look at the UK brands today, the large ones, most of them are owned by foreign companies,” Hawes said. “But the jobs are in the UK, the technology is in the UK, the production is in the UK, and what we’re trying to ensure is that that survives.”

For a waning automotive power such as Great Britain, a formula like that is a compellingly good compromise.