Thatcherite effort needed to save Britain's car industry, says former Aston Martin boss

The Government must attract battery-makers to the UK with the same determination that Margaret Thatcher showed in the 1980s when major car producers were convinced to invest in Britain, a leading industry figure has said.

Former Aston Martin boss Andy Palmer, who is now vice-chairman at European electric vehicle battery producer InoBat, says the future of British carmaking depends on new technologies developing on these shores.

"We’ve got to be mindful of local production," Mr Palmer said.

"Car-makers will want batteries near their factories and the Government has to go all out to attract and support investment in a UK battery gigafactory.

"It’s an existential threat now, just as the UK car industry faced in the 1980s."

He added: "Margaret Thatcher went out of the way to make sure that Britain won the deal to attract Japanese car plants in the 1980s and we need the same effort now."

Mr Palmer, a former Nissan executive, also welcomed Nissan’s announcement on Friday that it is committed to making cars at its giant Sunderland factory. 

"As an industry, we dodged a bullet with the Brexit deal," he said, referring to the agreement which avoids tariffs on exports of UK-built cars to the EU. 

"If that deal had been offered four and a half years ago, the industry would have signed off on it, as it basically means only extra paperwork, though [there is] some more colour in the agreement that needs attention, mainly around rules of origin (ROO).”

Mr Palmer was instrumental in the creation of the Leaf electric car - one of the models built at Sunderland. 

He praised Nissan’s decision to relocate production of the larger batteries for the Leaf to either the EU or UK within a year so the car meets ROO, which specify that a vehicle must have a certain level of "local content" produced in the UK or EU to qualify for tariff-free status. 

But he warned that without the creation of a battery gigafactory in the UK to service other domestic car producers, Britain will “lose” its car industry which employs or supports the jobs of 800,000 people.  

The UK has struck a trade deal with Japan - as has the EU - which removes tariffs on cars, meaning that without the attraction of local sourcing of batteries from a UK gigafactory, Japanese manufacturers could import cars built in their home nation.

“We’ve got to make it more attractive to battery production here,” Mr Palmer said. “Otherwise we will have cars imported from Japan which is not that great a cost in the overall production.”

Nissan’s commitment to Sunderland was welcomed by other UK manufacturers, though none would comment publicly. The continued presence of carmaking giants in the UK will support a network of parts suppliers, maintaining a healthy ecosystem for manufacturers.

One source at a rival said: "It's genuinely good news for the industry. The car industry - and the economy - needs a strong manufacturing base and Nissan's commitment helps provide that."