Carmakers come to UK as west Europe’s “lowest cost” site

Carmakers see the UK as a destination to put their factories because it has become one of the “lowest –cost” Western European manufacturing sites. That’s according to analysis just released […]

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By Vicky Ellis

Carmakers see the UK as a destination to put their factories because it has become one of the “lowest –cost” Western European manufacturing sites.

That’s according to analysis just released by US analysts, the Boston Consulting Group.

It claims “dramatic shifts” in cost competitiveness around the world are pushing companies into new investment strategies.

Called ‘The Shifting Economics of Global Manufacturing: How Cost Competitiveness Is Changing Worldwide’, the report looks at changes in direct manufacturing costs among the world’s 25 largest goods-exporting nations since 2004.

Harold L. Sirkin, a BCG senior partner and coauthor of the report said: “Many companies are beginning to see the world in a new light. They are finding that many old perceptions of low-cost and high-cost countries are out of date and they are starting to realign their global sourcing and production networks accordingly.”

The UK has risen 10 percentage points up the report’s index over other leading western European exporters since 2004, the BGC says, with car output increasing by around 50% since 2009.

It points to Jaguar Land Rover’s heavy investment, in March set to fill the first of 1,400 jobs at its new, multi-million pound plant in Wolverhampton where low-emission engines will be built.

Mexico is another country which appears to be attracting more business, as productivity largely “offsets” wage hikes.