UK car production passes 1.5m amid growing consumer confidence

Almost 10% more cars produced last month than in September 2012, boosted by strong domestic market

Car production in the UK has continued its upward surge with more than 1.5m vehicles built over the past 12 months – a volume unmatched since the financial crisis began.

Boosted by a buoyant domestic market, as well as demand for luxury models in the far east, almost 10% more cars, 140,888, were produced last month than in September 2012.

The month's tally pushes the total for the year to 1,125,433 units, nearly 4% more than were made in the first nine months of 2012.

Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders (SMMT), said: "Boosted by strong domestic demand, September's 9.9% rise in car manufacturing reinforces how the sector is one of the UK's biggest success stories of recent years.

"This year alone, more than £2.6bn has been committed across the UK automotive sector, from the supply chain to global car manufacturing brands.

"This long-term financial commitment and robust demand for UK-built products demonstrate the global appetite for high-quality, desirable products borne of the UK's world-class design, R&D and engineering."

Cheap financing deals and growing British consumer confidence in an economic recovery has seen the UK buck the sliding sales elsewhere in Europe with unparalleled sales growth, helping to drive up the new production figures.

Nissan, the largest manufacturer among the 30 automotive brands manufacturing 70 models in the UK, recently announced that its Sunderland plant would move to 24-hour production in the new year to meet demand. The plant is also the European base for production of the all-electric Leaf car.

Booming exports of luxury brands have also underpinned production, with Jaguar Land Rover, the Tata-owned carmaker whose three UK plants employ 26,000 people, recently reporting sales for the first three quarters of 2013 had already outstripped 2012's annual total.

The car production figures will be a further boost to coalition hopes of sustained recovery, particularly with its stated aim of rebalancing Britain's economy back towards manufacturing.

Last year's car exports, at over £30bn, accounted for 10% of UK exports and that figure looks set to rise. The prime minister's office, @David_Cameron, tweeted: "Great to see a sharp rise in car manufacturing in the UK. More than a million cars have been made so far this year. #GlobalRace".

While car production continued to rise, the SMMT reported that manufacturing of commercial vehicles was down by 27% year-on-year.

Hawes said the "subdued" figures were down to continuing uncertainty in the EU and restructuring of UK operations, adding: "While the overall market is striving against tough conditions, there remains cause for optimism in some areas, with the truck sector outperforming the market in September."
Article Source : http://www.guardian.co.uk
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Royal Mail was worth £10bn, said JP Morgan. It sold for £6bn less

Investment bank gave valuation before flotation, as unions accuse government of 'conspiracy against taxpayer'

News of the valuation from JP Morgan re-ignited the huge row over the privatisation with Billy Hayes, the postal workers union leader, claiming a "conspiracy against the taxpayer" and demanding the sacking of Vince Cable as business secretary.

The government sold shares in Royal Mail for 330p each, valuing the business at £3.3bn on 11 October. But the shares rocketed in value by almost 40% that day alone and closed at 529p, making the company worth more than £5bn.

The official float figure excluded around £800m of debt, which included would give the state-owned business an "enterprise value" of £4.1bn but still almost £6bn lower than the price tag suggested by JP Morgan.

The US bank declined to comment but well-placed sources confirmed the figure of £10bn and made clear that others pitching to sell the Royal Mail on behalf of the government had also priced the mail company as high as £7bn.

The Department of Business said a whole range of different price tags had been put on Royal Mail at different stages of the sell-off process which was conducted in the most thorough way. "The banks' proposals came months before any threat of strike action by the unions, financial market uncertainty in the United States and other factors which the government has already said were taken into consideration in setting a price for the company in September," said a spokesman.

Hayes, the general secretary of the Communication Workers Union, said: "On the opening day of the flotation Vince Cable wrote off the undervaluation as froth. A week later, we were told it was the fault of the CWU. We now have a prima facie case of a conspiracy against the UK taxpayer who were opposed to the sale and have now been robbed of billions. In any other walk of life this would be a sacking offence and we call on Vince Cable to resign. A full inquiry should be launched into the mis-handling of this unnecessary privatisation by Vince Cable. We would also like the matter to be referred to the public accounts committee to scrutinise how badly the taxpayer has been left out of pocket.

Chuka Umunna, the shadow business secretary, said the development only added to fears that taxpayers have been significantly "short-changed by David Cameron's Royal Mail fire sale".

He added: "Vince Cable has said that taxpayer value was 'central' to the government's strategy in selling Royal Mail but given the extensive consultation with institutional investors and banks which took place, both he and the prime minister have serious questions to answer.

"Crucially, they must explain when the Government was made aware that the sale was so massively oversubscribed by major investors and why, having considered a higher price, they rejected that option.

"We have called for a full investigation into this matter so it is welcome that the National Audit Office has announced it will be looking into the deal and publishing its findings in the Spring."But Whitehall sources said it was not surprising that banks pitching for business might overplay the value of Royal Mail in the hope that they would win the work. They said it was like an estate agent coming round to have a look at a house and trying to persuade the owners to hire them by offering the best price available, but without the full knowledge at that point of all the circumstances.

Over 21 investment banks offered their services in May and their appointment was overseen by another City institution, Lazard. The spokesman for the Department of Business added yesterday: "The proposals included indicative valuations of the company based, in many instances, solely on information already in the public domain. Banks made their own assumptions of Royal Mail's future performance. The range was wide with the median around £3.6bn taking into account [an] IPO [initial public offering] discount." Among the banks that did win the work were Goldman Sachs and UBS.

Article Source : http://www.guardian.co.uk

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