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The big picture: Ryton news rocks industry

The automotive industry is rocked again with the news that Peugeot is to close its Ryton Plant in Coventry, with the loss of 2,300 jobs.

Cars have been made there since 1946, when the Rootes Group started producing the Sunbeam-Talbot 10 and 21.

The Midlands has suffered heavily recently: more than 6,000 jobs were lost at Longbridge when MG Rover collapsed last year (and far more casualties when you consider its suppliers), and at the end of 2004, more than 1,100 were made redundant when Jaguar closed its historic Browns Lane site.

Allegations abound that Peugeot has taken the easy route by closing the British plant, and that it would be inconceivable for the French workers to be laid off in such scale. But, the truth is, French workers are coping with an uncertain future, too. The EU is an expensive place for manufacture, and carmakers are looking to expand in cheaper places: Peugeot’s 207 is already being produced in Slovakia.

In the UK, labour relations mean it is very easy to set up business, but it is also easy to close it down, especially compared to countries such as Italy, France and Germany, where the unions are strong.

Closing any business is a tough decision, but this is endemic of the oversupply crisis faced by many carmakers. They have to reduce the number of plants to better balance supply with demand. More tough decisions will need to be taken, and there’s already plenty of speculation about Vauxhall’s Ellesmere Port site. Will the next generation Astra be made there?

But how does this impact retailers? The industry is not all doom and gloom: Honda has enjoyed steady growth in the UK since opening its Swindon site; Nissan, Toyota and Land Rover are all thriving; and Mini enjoyed its highest ever sales in March.

Peugeot dealers have already ridden some rough times. They’ve seen sales and market share fall alarmingly over the past couple of years. With the new 207 on the horizon, during this bumper year of launches from all manufacturers, an upward trend in sales must be in sight. Here’s hoping.

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