A thread about Brexit, the UK, Germany and Japanese automotive companies, based on my response to a Brexiter in the FT comments section, where I got a bit fact-y👇Seemed a shame to let it go to waste.
Germany, particularly North Rhine Westphalia put a lot of effort into attracting Japanese companies since the 1960s. With the result that there are more Japanese companies in 🇩🇪 than the UK + one of the highest densities of Japanese outside of Japan in the Duesseldorf area. 1/
But Japanese automotive factories are not relocating from 🇬🇧to 🇩🇪now, they're opening up plants in Slovakia, Hungary, Czech Rep, Slovenia etc or Turkey or North Africa. So UK will have to be very cheap post Brexit to compete with that plus a tariff barrier and border checks. 2/
It's said you need a population of 100 million to sustain an automotive supply chain. So car companies are moving to a global structure where each plant competes to get a new model. UK plants are about to be massively handicapped in that competition - soft or hard Brexit. 3/
The Japanese population in the UK is 62,887, not "well over 100,000", and this is starting to decline. Of which around a third are permanent residents and their families (so not corporate expats) and 13,000 are students/academics (big decline in this group recently) 4/
There are 45,784 Japanese living in Germany and this is rising. 16,611 are corporate expats and their families, not far off the UK corporate expat total of 17,752. 5/
As for the automotive manufacturers - I have not seen any reshoring to UK of Japanese parts manufacturers. Almost all the big Japanese parts suppliers with bases in the UK have factories elsewhere in the EU and some no longer have any manufacturing in the UK. 6/
For example, Sumitomo Electric Wiring Systems (which acquired Lucas in the UK in 1999) is probably the biggest Japanese employer in Europe, Middle East & Africa + no longer has any production in the UK. They have production in 🇩🇪 and also in Eastern Europe and North Africa. 7/
Yazaki, another automotive parts manufacturer and second biggest Japanese employer in the region, doesn't have any manufacturing in the UK or Germany - their plants are all in Eastern Europe and North Africa. 8/
Japanese automotive companies have constructed global supply chains so that if there is an obstacle somewhere - natural disasters or trade barriers, they can easily circumvent. 9/
Honda says 75% of its components come from continental EU, 85% for Nissan. BMW says 90% of components for its 4 UK factories come from continental EU. 10/
What the UK has become is a global/European design and engineering hub for automotive and other sectors. Which requires multicultural multilingual skilled engineers who can easily move from one client site to another. 11/
It's one of the ways the UK makes up the trade deficit in goods with a surplus in services. For now. 12/12
