In the 1950s the UK was the second largest manufacturer of cars in the world, after the US.
The West Midlands formed the beating heart of the production line through British motoring powerhouses such as Austin, Triumph, Morgan, Jaguar and Land Rover.
And such was the global popularity of the iconic West Midlands-made cars that the UK was the largest car exporter in the world.
But in the second half of the last century the UK slipped behind its competitors and, by 2000, it had slumped to only 12th place among the world’s leading car producers.
Then, on 8 April 2005, the death knell appeared to sound for the West Midlands automotive industry when a long-established name – MG Rover – crashed into administration with the loss of 6,500 jobs at its famous Longbridge plant.
Most of the Longbridge site has since been taken on by St Modwen, which is working up plans for a £1bn residential-led scheme – apparently condemning a once great motoring legacy to be lost forever.
However, recent figures appear to tell a different story. West Midlands’ car manufacturing volumes climbed by 10.7% in August and by 7.5% in September, compared with the same months last year (see box).
And the industry has even returned to Longbridge, albeit on a smaller scale.
Chinese firm Nanjing, which acquired the assets of MG Rover following its collapse, has restarted MG TF production using only part of Austin’s old South Works.
Beneficiary
Engine production in the UK is particularly strong – up 5% so far this year compared with 2010.
And the West Midlands’ engine-building sector has been the biggest beneficiary of good news after Jaguar Land Rover revealed in September that it will invest £355m to build low-emission engines in Wolverhampton.
The 800,000 sq ft advanced engine facility will be built at Wolverhampton business park i54.
A number of locations had been considered for the new facility, including sites in Wales and India, say JLR chiefs. But after a strategic review it was decided that the West Midlands offered the best site in terms of proximity to the group’s vehicle assembly and engineering facilities and access to a highly-skilled workforce.
JLR chief executive Ralf Speth says the company will invest £1.5bn a year over the next five years in product development, giving the new West Midlands’ facility a “crucial global role”.
But the JLR plant is not the only recent boost for the region. CPP Global Holdings completed the purchase of the 23-acre Browns Lane site in Coventry in September. It plans to build a new version of the legendary Jensen Interceptor sports car on the site of a former Jaguar motor plant.
And CPP founder and co-owner Brendan O’Toole believes that Coventry and the surrounding area has the potential to become the “supercar design and manufacturing capital of the world”.
Simon Lloyd, head of logistics at DTZ, says that the region’s highly-trained and flexible workforce is the driver for the recent successes. “We are damn good at the precision and high-value end of the market, and now we are getting the results,” he says.
But will the results translate into a rush for property?
David Wilmer, a partner in GVA’s industrial team, which advised on JLR’s i54 deal, says that parts and component suppliers are already showing strong interest in Jaguar and Land Rover.
“Primarily, they want to be in an area between Coventry and south Birmingham because it’s close to the major car plants,” says Wilmer.
Opus Land has gained planning permission for a 474,500 sq ft industrial scheme on a 22-acre site at junction 9 of the M6.
Co-owner and development director Gareth Williams is targeting occupiers from the engine manufacturing supply chain, particularly as a result of the i54 deal. “It is a huge win for the region,” he says. “There will be a lot of supply contracts let out in due course and people might be moving to the region.
“We are two junctions down and we have to be targeting that sector. We will be plugging into the supply chain for i54.”
Ranjit Gill, a director in BNP Paribas Real Estate’s industrial agency team, says that the real rush for space as a result of the recent announcements has yet to be seen. But he is expecting that to change over the next 12 months.
He says: “The bigger parts suppliers will need anything from 20,000 sq ft to 100,000 sq ft, while the smaller precision supply chain is typically looking for 5,000 to 15,000 sq ft units.”
But North Rae Sanders partner Robert Rae says 30% of his firm’s deals in the West Midlands so far this year have been in the manufacturing sector – a threefold increase on last year. “The supply chains are definitely starting to ramp up already,” he says.
“The danger now is that the stock is drying up quickly. We can see incentive periods being reduced over the next few months. We won’t quite get back to spec building in the near future, but we will see capital values rise for second-hand stock.”
According to Rae, standing stock capital values have bottomed out at around £35 per sq ft, compared with around £65 per sq ft for new design-and-build sheds.
