Brexit of the automotive kind

British motoring companies were calling splitsville well before Brexit



by

George Kuruvilla

Published: Thu 21 Apr 2022, 9:32 PM

On January 31, 2020, at precisely 23:00 GMT, the United Kingdom withdrew its seat from the European Union. This was a momentous event, after all the UK was member state of the EU and its predecessor European Communities for almost five decades, since January 1, 1973. But this wasn’t a decision they pulled out of a hat. This was the outturn of a long-drawn political process that officially began, following the UK-wide referendum held on June, 23, 2016, in which about 52 per cent of the votes placed were in favour of leaving the EU, while about 48 per cent leaned the other way. Of course, it didn’t begin there either. The idea of a sovereign Britain had been brewing in British minds for years and these were just the dates of fruition, so to say.

Car manufacturers saying bye-bye

But in the automotive world, Brexit of another kind was already a long-operating business phenomena, although it was never referred to by that name. Long-standing, well-established and famously British motoring companies have gradually moved across the pond i.e., the U.S. or across the channel i.e., Europe mainland, gaining new owners, manufacturing plants and access to technology. Let’s look at some names that have abandoned ship.

Rolls-Royce & Bentley

Rolls-Royce, the brainchild of Henry Royce and Charles Rolls, was founded in 1906; and Bentley, the creation of W.O. Bentley formed in 1919 are arguably the favourites of Britain. These were and still are the most coveted names in automotive luxury globally. After keeping the name in the family i.e., UK for almost a century, in 1998, Vickers plc, the then owners of Rolls-Royce Motors and Bentley Motors Limited decided to put them up on sale. It seemed like the German automobile group BMW AG would take over the business, as they were already suppling internal combustion engines and other components for Rolls-Royce and Bentley cars. Their final offer stood at a handsomely large £340 million, only to be outbid by Volkswagen Group, who offered £430 million. Between 1998 to 2002, BMW and VW sorted issues of use of name, logo etc. And from 1 January 2003, BMW became the sole proprietor of the ‘Rolls-Royce’ nameplate and Volkswagen Group took over ‘Bentley’. Anyway, the once-national assets are now under foreign ownership. Thanks to which the quality of the vehicles produced by both brands have improved drastically. This also allows the borrowing of components from the common parts bin for a positive effect, as we have seen with the steering wheel stalks and the iDrive infotainment system in Rolls-Royce vehicles, which have been sourced from BMW.

MINI

Similarly, MINI, the famed British automotive marque founded in 1969, known for its supermini segment of vehicles, have been owned by German automotive conglomerate BMW Group since 2000. But production for the MINI 3-door hatchback, Clubman, Coupe and Roadster remain on British soil, at BMW’s Plant Oxford in Cowley, England. While the MINI Convertible and larger Countryman crossover SUV are assembled at VDL Nedcar in Born, the Netherlands for a while. The designers have tried to retain the Britishness of the brand by applying the optional Union Jack scheme on the roof and in more recent times, incorporating the flag motif on the tail lamps. However, the latter did not work much in their favour, as the split pattern of the flag on the turn signals were indicating the wrong direction.

Jaguar & Land Rover

Other acclaimed auto makers have also ‘Brexited’ the island nation. Owners of Jaguar, the maker of the E-Type sports car and Land Rover, the makers of the Range Rover SUVs, the UAE’s favourite off-roaders, have changed hands over the years.

The first out-of-country investors to acquire Jaguar was Ford Motor Company in 1999. The Detroit automaker also gained ownership of the Land Rover brand in 2000. Later, both these British companies were acquired by the Indian conglomerate TATA Motors in 2008 for a net consideration and all-cash transaction of $2.3 billion, as announced on March 26, 2008. The two British brands were then merged under one umbrella called the Jaguar Land Rover Limited in 2013. Funding from the Indian company has aided in the revival of both brands, allowing them to introduce new models to their respective ranges like the F-TYPE and XE with the Jaguar, and the Discovery Sport and Defender with Land Rover.

Royal Enfield

India has also been instrumental in keeping alive the good name of Royal Enfield. Originally known as the Enfield Cycle Company, headquartered out of Redditch, Worcestershire, RE is currently the oldest global motorcycle brand in continuous production. The first Royal Enfield motorcycle was built in 1901. And in 1955, the company partnered with Madras Motors in India to form ‘Enfield India’ to assemble the 350cc Royal Enfield Bullet motorcycle in Chennai (then Madras). By 1962, all components were made in India. And as of today, it stands the motorcycle company is a subsidiary of Eicher Motors Limited, an Indian automaker. Now, thanks to the sales success of the 650cc twins i.e., Continental GT 650 and INT 650, which are the best-selling motorcycles in Britain, RE has been able to replicate the success of old. This scenario of India selling Enfield motorcycles to the English also reminds one of how, under colonial rule, Britain took raw materials from India and then sold it back to the Indians at higher prices. The irony has been written into history!

Lotus

The sports car company out of Norfolk, known to manufacture lightweight, purpose-built road racers like the Espirit, Exige and Evora; has enjoyed a long history of F1 racing, was first established in 1948. Following lack of capital in 1986, it was sold to the American General Motors, which eventually took up 91 percent of the stock.

On May 24, 2017, Chinese multinational Zhejiang Geely Holding Group Co. announced that was purchasing a 51 per cent controlling stake in Lotus. Geely also own Volvo currently. The remaining 49 per cent were acquired by Etika Automotive, a holding company of Proton’s major shareholder Syed Mokhtar Albukhary. Both partners are now pouring in some $2.8 billion to accommodate their plans to go electric by 2028 and increase production numbers from around 1,500 annually to tens of thousands.

McLaren

Another celebrated name in Formula 1 is McLaren. They also built the legendary McLaren F1 supercar, which became the world’s fastest production car in 1995.

The maker of exotic supercars was founded in 1963 by Bruce McLaren. It was later run by Teddy Mayer and then from 1981, it was Ron Dennis, who was the McLaren Group’s largest individual shareholder, CEO, chairman, and director. Later it was Germany’s Mercedes-Benz (Daimler Motors) owned the highest stake in the company at 11 per cent. However, their holdings were bought out in 2011 in an effort to make McLaren an independent automotive firm again. In 2017, Ron Dennis’ stake was bought out by the other shareholders. Now the largest shareholder of the McLaren Group is the Bahrain Mumtalakat Holding Company, the sovereign wealth fund for the Kingdom of Bahrain, which is primarily owned by the royal family of Bahrain, though it remains a public company.

wknd@khaleejtimes.com


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