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Fantastic news for the UK as a new in car factory will open in Coventry on Wednesday, with it creating more than 1,000 jobs and giving a welcome boost to the automotive industry at a time of great uncertainty, as the growth of the fledging industry risks being curtailed by the uncertainty caused by Brexit and complex global politics, which analysts say led to a drop in investment in the car sector last year.
The London Taxi Company, manufacturer of the world famous iconic London black cab, is opening a plant that will make their new electric taxi model. The factory is being financed with £300m of investment from LTC’s owner, Chinese company Zhejiang Geely Holding Group, as well as a £16.1m grant from the government through the regional growth fund.
The new LTC factory is also being supported by £64m from the Department for Transport towards encouraging the use of electric taxis. This funding will be used to offer taxi drivers a £7,500 discount on the cost of an electric vehicle and pay for more charging points across the UK.
Greg Clark, the business secretary, said the new facility, which will also house an R&D facility, demonstrates that the UK is a “world leader in the development of new automotive technologies”.
Clark has pledged to put support for the development of electric vehicles at the heart of the government’s strategy.
The business secretary commented: “Our iconic black cabs are famous across the world. The London Taxi Company’s impressive new factory and R&D facility showcases the innovation that makes the UK a world leader in the development of new automotive technologies.
“Through our ambitious industrial strategy, we are committed to building on our strengths and taking advantage of the opportunities the new low-carbon economy provides.”
A report published earlier this week warned that the cost of car manufacturing in Britain could increase by £2,370 in the event of a “Hard Brexit”, potentially forcing manufacturers to look at moving production out of the country, as car manufacturers make very small margins on some vehicles. Even if the UK agrees a tariff of 5% with the EU on importing and exporting cars and 2.5% on components then in excess of £1000 will be added to the cost of manufacturing.
The research warned that for some manufacturers it would be an obvious business decision to abandon British factories if 10% WTO tariffs are introduced. The cost of exporting 200,000 cars a year from the UK would be £920m after two years, which PA Consulting said would “easily” cover the cost of building a new plant in the EU.
John Hayes, the transport minister, said: “This government is committed to improving air quality and reducing pollution in towns and cities, which is essential for people’s health and the environment.
“This is also great news for the economy as we invest in cutting edge technology and the next generation of transport and engineering professionals by creating thousands of new high skilled jobs.”
I know the black cab industry very well from my time at Ride Hailing app Gett (Formerly GetTaxi) whilst the news of the new factory is obviously fantastic news for the UK and the industry, I do have to question if LTC can sell the 5000 units that they are projecting, fingers crossed they will have a strong export market, because sales will be especially difficult in the UK, where their price point for previous models such as the TX4 has prohibited many drivers from upgrading to their latest model and instead opting for Mercedes or Volkswagen. I also know that many of the drivers who did upgrade to the TX4 were very unhappy with the build quality and had problems, which further discouraged other drivers from upgrading, with the common conception being that Mercedes or VW would be a better quality option, more reliable and cheaper over the period of ownership.
Both Mercedes and VW are investing heavily in autonomous technology, strategically partnering with ride sharing apps and also investing in them too, which means that they are better aligned for the future than LTC.
Another issue is that as we don’t know exactly when Autonomous cars will be mainstream, potential new drivers would be forgiven for being reluctant to spend vast amounts of time and money, investing in doing the knowledge and becoming a qualified black cab driver if they potentially may have a limited number of years thereafter in the job.
With the majority of black cab drivers ageing, Unless regulation changes to make it cheaper for the next generation to become a black cab driver and the looming introduction of autonomous vehicles to our roads is further away than is currently anticipated, then as sad as I am to say it but with the strategic alignment between manufacturers, digital disrupters & autonomous car tech… I think that its almost certain that Black Cabs will become as obsolete as a red phone box, iconic but no longer mainstream.
I hope I am wrong and these 1000 new jobs have a long term future….
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