McLaren Automotive CEO Michael Leiters said that the UK needs to recognize that it cannot compete on the cost of mass-produced cars and should instead focus on driving the manufacture of high-value cars, according to Automotive News Europe.
Speaking at a conference organized by the Society of Motor Manufacturers and Traders (SMMT) in the UK, Leiters said, “If we try to compete on cost and come out on top, we will fail. This doesn’t just apply to carmakers, it applies to the supply chain as well.”
McLaren is encouraging the UK government to develop a strategy to help drive the development of more high-end technologies. In addition to McLaren, the strategy would also benefit other British luxury carmakers such as Bentley, Aston Martin, Jaguar Land Rover, Rolls-Royce, and Roadster.According to Leiters, “I firmly believe that the UK is at the top of the high-performance car industry. I think we have to understand that and we have to invest precisely in that direction.”
In 2023, the UK produced 905,117 vehicles, well below the more than 1.3 million produced in 2019, according to the SMMT. Over the past 20 years, the UK has lost several mainstream model manufacturers. The most recent was Honda Motor. The company closed its plant in Swindon, which makes the Civic model, in 2021. Prior to that, Ford suspended car production in the country in 2013, while Peugeot closed its plant in Ryto in 2006. Among mainstream car brands, Nissan and Toyota are the only two that produce passenger cars in the country.
Last month, Stellantis threatened to stop making vans in the UK if the government did not relax its requirements for zero-emission vehicles. The automaker said the regulations driving electric vehicle sales were out of line with actual customer demand.
Leiters wants the UK government to recognize that the proposed 2035 emissions timetable for new cars is much more difficult for companies like McLaren because “for the time being, consumer demand for electric supercars remains extremely low due to the lack of technological sophistication.”
McLaren has called on the government to encourage UK supply chain firms to research advanced, high energy density batteries specifically for the next generation of high-performance cars. The company argues that moving too quickly to electrification could kill the value proposition of premium internal combustion brands, which allows companies to set higher prices.In 2023, McLaren sold 2,137 cars, all of them built in the UK, but made a loss of £872 million.
Mainstream and premium carmakers have pointed to the impact of reduced UK production on their supply chains. Carmakers such as Bentley and Nissan have also said that it has become more difficult for them to source parts from within the UK as suppliers move out of the country, mainly to lower-cost countries.
Luxury carmakers in the UK are often reliant on a single parts supplier, so if a supplier gets into financial trouble, these carmakers will have to step in to bail them out or face months of supply disruption as they look for alternative suppliers.
However, David Bailey, a professor of business economics at Birmingham business School, disagrees with Leiters’ focus on only high-end and luxury automakers. “I don’t accept the argument that there is still a mainstream market in the UK. I think (focusing only on high-end and luxury carmakers) would be completely counterproductive.”
Translated with DeepL.com (free version)