AM Online

Tungstone closure a big shock to battery market

UK automotive battery production is at risk of running flat after Tungstone Batteries announced plans to shut its factory in the East Midlands, making 180 people redundant.

The Ivensys Group, parent company of the Market Harborough, Leicestershire firm which has been producing batteries since 1925, blames the imminent closure on a downturn in trading last year.

“Against this background it has been necessary to review our plans for the future, realising that current trading performance is unlikely to improve,” a group statement reads.

Tungstone, which has been up for sale for five years, has entered a 90-day consultation period during which it will continue to produce industrial and automotive batteries.

Its closure will leave just one vehicle battery-maker in the UK - Yuasa Batteries, based in Birmingham which employs about 800 people and produces 90 per cent of nickel-plated batteries used in Europe.

The cost of manufacturing batteries in the UK is high - a problem compounded by their low retail price.

This is driven by the strength of the pound, which has opened the doors for battery importers and distributors to flood the market with low-cost, low-technology products creating over-supply and forcing prices down. However, sources say Tungstone's real problem could have been its failure to develop cutting-edge technology and secure critical original equipment business with carmakers, which could have given it pan-European representation.

Paul Matarewicz, managing director of importers Varta Batteries, says: “The news is symptomatic of the demise of British industry because of the inflated value of the pound.” And John Richards, sales director of battery importer and distributor Platinum Batteries, is calling for battery prices to be raised by about 70 per cent.

“The price of batteries has to rise. At the moment, the most popular battery in the UK is the O63 priced at £29.99. That should be closer to £49.99 to allow room for profit and growth,” he says.

If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please login.

Comment as guest


Login  /  Register

Comments

No comments have been made yet.