INDUSTRY WATCH: AUTOMOTIVE – Vauxhall – moving up to pole position

For an antidote to the grim news emerging almost daily from the UK motor industry, now is a good time to look at the company which will probably become the country’s largest vehicle maker. Surprise, surprise – it’s Vauxhall Motors. The local subsidiary of General Motors made a record 339,000 vehicles last year, second only […]

For an antidote to the grim news emerging almost daily from the UK motor industry, now is a good time to look at the company which will probably become the country’s largest vehicle maker. Surprise, surprise – it’s Vauxhall Motors.

The local subsidiary of General Motors made a record 339,000 vehicles last year, second only to the 368,000 made by Rover and ahead of Nissan (271,000) and Ford (255,000). Things will be different this year and next.

The emasculation of Rover and fears about Ford’s Dagenham plant are in stark contrast to the expansion at both Vauxhall and Nissan.

Nissan, which has now introduced a third model to be made in Sunderland, will produce around 350,000 cars this year, while Vauxhall is about to start the most extensive development in its recent history.

It is opening an engineering centre at the Millbrook test track in Bedfordshire next month to develop the GM/Renault joint venture van known as X83. The centre will employ 200 engineers from the two companies to work on the model, which will replace the Vauxhall Arena and Renault Trafic. It will be made at IBC in Luton from early next year at a rate of at least 75,000 a year.

The replacement for the Vectra has also been confirmed for Luton for the autumn of 2000. And in addition, GM’s new roadster for Europe, the VX220/Speedster, will be made under contract by Lotus from this summer.

In other words, the UK will soon be producing an unprecedented 450,000 vehicles a year for Vauxhall, Opel and Renault. The strength of sterling is a concern (45% of new Vauxhall cars last year were exported), but the company is profitable and its local market share is increasing. Besides, the developments fit well with the convictions of chairman Nick Reilly: `Manufacturing is an important part of the UK economy,’ he insists.

The moves, however, do raise a couple of questions. When X83 production begins at IBC, the ageing Frontera will be moved out. Where will GM make its replacement – if there is to be one?

It could source the Frontera from Isuzu’s factory in the US. Or are there any implications to pick up following GM’s share swap with Fiat Auto? And If GM wins the big battle for Daewoo Motor, what is to become of the LDV van factory in Birmingham? If GM succeeded with a counter-offer for Land Rover, the Frontera would simply wither away.

The other puzzle is the future of the Ellesmere Port-made V6 engines, fitted to some Saturns and Saabs as well as top Vauxhalls and Opels. GM’s recent agreement to source V6 engines from Honda throws up doubts about the longer term future of the Ellesmere Port engine, whose quality, reliability and performance has not been one of GM’s crowning glories.

GM has so far said that the Honda engines will be used only in North American products, but that will not reassure anyone who works on the engine line at Ellesmere Port.