Wavertreelad
Member
- Joined
- 24 Feb 2013
- Messages
- 811
There are probably many reasons for the move by Hitachi. The Japanese economy has been in decline for many years so the prospect of major domestic sales is very unlikely. The Japanese currency is also considered to be uncompetitive against other major currencies so trying to export from a manufacturing plant in Japan becomes very expensive. The surrounding countries are relatively small or mature and potentially could buy cheaper from China. The shipping costs from Japan are relatively cheap as the trains can be moved on scheduled roll on/roll off services to Japan to Europe, whilst EU Customs duty on electric locomotives is only 1.70% of the landed EU Port value, cars incidentally are 10% so hence the attraction for non EU car manufacturers to establish a presence in the EU. Manufacturing in the EU avoids the payment of duty, and establishing in the UK is particularly favourable because the problems of the Euro are avoided. Let's not forget the Euro zone tax payers are likely to be paying for the privilege of being members of the Eurozone for many more years which will inevitably result in higher taxes for companies and individuals alike. The UK also has far less stricter employment laws than many EU states, and even if the UK voted to opt out of the EU, this would take many years and in all likelihood the UK would simply a negotiate a preferential trading agreement like that already in place for Norway and Switzerland.
Apart from the economic benefits, including EU and government grants for setting up in the UK, and the commercial benefits of being in the same market as your competitors especially if there is a prospect of major orders for many years to come, there is one important other aspect, the language. English is the language of international commerce, for many non EU companies this is a huge attraction as it avoids staff posted to the new entity from the parent organisation having to learn an additional language. Allegedly, this was one of the main reasons why giant Taiwanese shipping line Evergreen moved it's European Headquarters from Hamburg to London
http://www.evergreen-line.com/tbo1/...n&Type=&Country=GB&CountryName=United Kingdom
One of the other reasons allegedly was the lack of direct flights from Taipei to Hamburg, despite the fact that the City was considered at the time and remains the European giant of the Far East trade.
I suspect either HS2 will eventually be extended northwards from York or a route cleared to the North East on the ECML with Hitachi picking up part of the bill to enable it export it's UK trains to mainland Europe and a solution to the missing link between HS1 and HS2 will be found when the project is advanced.
Hitachi will have micro analysed every facet of this deal and would only have committed if all the figures and advantages suited their business case. They will also likely to have had discreet discussions with Japanese car manufacturers in the UK, Nissan, Toyota and Honda to verify their findings, no stone will be left unturned.
Apart from the economic benefits, including EU and government grants for setting up in the UK, and the commercial benefits of being in the same market as your competitors especially if there is a prospect of major orders for many years to come, there is one important other aspect, the language. English is the language of international commerce, for many non EU companies this is a huge attraction as it avoids staff posted to the new entity from the parent organisation having to learn an additional language. Allegedly, this was one of the main reasons why giant Taiwanese shipping line Evergreen moved it's European Headquarters from Hamburg to London
http://www.evergreen-line.com/tbo1/...n&Type=&Country=GB&CountryName=United Kingdom
One of the other reasons allegedly was the lack of direct flights from Taipei to Hamburg, despite the fact that the City was considered at the time and remains the European giant of the Far East trade.
I suspect either HS2 will eventually be extended northwards from York or a route cleared to the North East on the ECML with Hitachi picking up part of the bill to enable it export it's UK trains to mainland Europe and a solution to the missing link between HS1 and HS2 will be found when the project is advanced.
Hitachi will have micro analysed every facet of this deal and would only have committed if all the figures and advantages suited their business case. They will also likely to have had discreet discussions with Japanese car manufacturers in the UK, Nissan, Toyota and Honda to verify their findings, no stone will be left unturned.