The splash in The Daily Express last Wednesday about Renault and Geely, the Chinese car maker and owner of Volvo, forming a joint venture company and investing billions in the UK to make ultra-low-emission internal combustion engines always seemed slightly at odds with reality. I couldn’t believe it when I first read the piece. What possible advantage could Britain offer these two giants of the automotive industry to make them choose the UK? Ford pulled out of making engines here in the autumn of 2020. However, the BBC also covered the story so it did seem to be factual.
The Express claimed that "Britain has scored a major Brexit victory as a new global company has decided to base itself in the UK."
"The firms will reportedly invest around £6 billion to develop low-emission, petrol, diesel, and hybrid engines in a move which bolsters the UK’s automotive footprint. The new plan will employ around 19,000 workers at 17 engine factories alongside five research and development hubs."
Tom Tugendhadt the Home Office minister for security tweeted about it being good news for the UK and thousands of future jobs:
This is good news for the UK and for thousands of future jobs. https://t.co/Q6CNcecApz
— Tom Tugendhat (@TomTugendhat) July 13, 2023
However, I didn't need to wait too long before the mystery was solved. Someone posted the truth on Twitter. No manufacturing plants or jobs are coming to the UK at all. The Express story seemed to come from a press release by The Renault Group the day before but was clearly misunderstood by the journalist who wrote it up.
The joint venture - a project named Horse - was signed in November 2022 and announced by Auto News Europe in March this year, so hardly new. There is also a whole website devoted to the project that you can see HERE.
Helpfully, it includes a map showing where the five European plants are to be located. None are new and none are in the UK:
Another three are in South America and the other nine are in China. The UK will see virtually none of that new £6bn investment. And far from it being a benefit of Brexit, it is nothing to do with Brexit. As far as I know, Renault has never built engines in the UK and has never had plans to do so. But if it was unlikely before Brexit, it is unthinkable now.
It certainly isn't going to "bolster the UK's automotive footprint" as the Daily Express suggested.
Edwin Hayward posted a useful Twitter thread two days after the story appeared:
"Renault and Aston Martin backer Geely to launch UK firm injecting £6bn and creating 19,000 jobs"Gosh, doesn't that sound great? Tory MPs and the RW press have been feasting on the story.Pity it's not true.Let's take this step by step...— Edwin Hayward (@edwinhayward) July 14, 2023
The Express story is hardly a surprise. They were enthusiastic cheerleaders of Brexit and are now clutching at every passing straw to convince themselves and the dwindling band of leave supporters that it is still a good idea. What is more surprising is that the BBC also carried the story and so did CityAM. These reports might not have claimed it as an endorsement of Brexit, but they were still highly misleading.
Nobody seems to have checked with Renault or Geely.
However, the really revealing thing for me is that leading politicians like Liam Fox, Tom Tugenhadt, and Penny Mordaunt all tweeted or retweeted the original story from the BBC.
They actually thought that the new joint venture company would invest £6 billion in the UK and support 19,000 jobs here in the future. Why would they choose Britain? What possible advantage would they enjoy in building new capacity in this country and then face a mountain of paperwork and potential tariffs exporting the vast majority of the output into the EU single market?
The only way they might have been persuaded to build a plant here would be if the UK taxpayer was to fund it generously but there was no mention of any government money at all and I suspect even that wouldn't have helped. The trade barriers and potential for a trade war would simply be too costly and too risky.
It’s like thinking a Chinese company hoping to expand in the UK market would build a new factory in Calais to supply it. There is literally no sense in it.
Yet, these MPs and ministers (a former one in Fox’s case) seemed to believe in Santa Claus.
The JV will indeed build a headquarters here but I think this is simply a neutral venue so that neither China nor France is seen as the leader, plus if any legal disputes arise in the future they can be settled under English law. I suspect China wouldn’t be happy to see any role for the ECJ and Renault probably think of London as providing the next best option, leaving it to a Chinese court being understandably problematic.
I am pretty sure profits will all be booked elsewhere so we won’t even get any great tax benefits. You can be sure the HQ staff will be minimal and nowhere even close to 19,000 as the reports implied.
To have believed the original story you would need to have gone beyond deluded and be at the edge of human imagination. Why would you need 17 engine factories, as well as five research and development hubs? And how could it be achieved by the end of 2023, just five months away? It simply didn't add up but nobody seemed to question any of it.
