Select Committee on Trade and Industry Minutes of Evidence


Examination of Witness (Questions 180 - 187)

TUESDAY 27 JUNE 2000

MR TOD EVANS

  180. And have you noticed that those charges have gone up significantly above the rate of inflation?  (Mr Evans) I have noticed that they do not seem to be open to the kind of competitive pressures that so many other products and services appear to be.

  181. And you are using, what, the Dover port?  (Mr Evans) We are using the Tunnel, we load cars at our manufacturing plants in France and we load boxes of components and put them on trains, and that train whistles all the way through the Tunnel and discharges in the Midlands, and we also still use boats for built-up vehicles. And I just make the observation that those costs of just shipping across the Channel do not seem to be open to the same competitive pressures that the rest of the activities seem to be.

Chairman

  182. You have not made any approaches to the Office of Fair Trading, or anything like that, to have these matters investigated?  (Mr Evans) No.

  183. Just trying to pull the threads together, Mr Evans, would it be right, in summarising, Peugeot UK, located at the moment on really one site, producing 200,000 cars per year, a model which will have to be replaced in three to four years' time, and investment decisions being taken on that; when would you anticipate their being taken?  (Mr Evans) They are normally in the time frame of some two years ahead of the final investment.

  184. So you are talking about maybe 18 to 24 months from now there would be the possibility of `make up your mind' time for the main board, if I put it that way?  (Mr Evans) Yes.

  185. And would you envisage that, a decision of this nature, the significance of the pound/france, or pound/euro, relationship would be significant in that decision-making process?  (Mr Evans) I would say so, yes.

  186. So that if we do not have an exchange rate which is more sympathetic to your business needs then it might be the case that you would not be looking too favourably at the UK?  (Mr Evans) I think that we are going a little bit too strongly. All I am saying is that when you have an additional factor, such as an exchange rate, that you have to manage, and when you have an exchange which is clearly more linked to a North American currency, in terms of its movement, than it is linked to a European currency, as the evidence suggests so far, then there is a risk in that. And that risk will carry a certain weighting when we look at all the other pros and cons of UK investment. We are enthusiasts for UK manufacturing, as a Group, we see our Ryton facility as an integral part of our European manufacturing set-up. But there is this risk, in terms of currency, which will always weigh against the UK, and therefore we will have to find other compensating reasons to justify continued growth in the UK that would not have to be found by plants that are in the euro-zone.

  187. Thank you very much. That is, I think, a very helpful and frank expression of your concerns. I would hope that some of us would be able to visit your Ryton plant later in the year, if we can find a mutually convenient time, because we are trying to get a feel for the production side, as well as the conversations like this, if that would be possible?  (Mr Evans) We would very much welcome that. We have a lot to say about our manufacturing business in the West Midlands, and we would very much enjoy the opportunity of having members of the Select Committee come up and understand what we are doing at first-hand.

  Chairman: Thank you very much.





 
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