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Car Imports

Volume 931: debated on Monday 9 May 1977

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asked the Secretary of State for Trade what was the total import penetration of the British car market by foreign producers for the first three months of this year compared with the same period of 1976.

According to figures from the Society of Motor Manufacturers and Traders, import penetration of the United Kingdom car market in the first three months of 1977 was 42·8 per cent., compared with 34·7 per cent. in the same period last year.

Does the hon. Gentleman realise that the situation is still giving rise to considerable concern and that in January this year, for example, we exported only 103 British cars to Japan, compared with 162 in the same month last year? What improvement does the hon. Gentleman expect in the export of parts and components to Japan as a result of the buying mission which came to Britain in March?

Certainly I agree with the hon. Gentleman that there is considerable concern about the trading position in respect of our motor car industry. The basic problem remains that we have to produce sufficient cars to meet domestic demand and also the demands of overseas markets. With regard to the export of commercial vehicles and components, we have a very substantial surplus, although certainly in the case of trade with the EEC it does not match the deficit on trade in cars. I cannot give a direct answer to the hon. Gentleman's last point but will certainly let him know.

What estimate has been made of the possible total import penetration if the policy of the Conservative Party had been pursued and British Leyland had been allowed to collapse and Chrysler had withdrawn from this country? Will my hon. Friend in a positive way support the "Buy British" campaign to help the British car industry in this country?

The consequences had British Leyland and Chrysler been allowed to collapse are virtually unimaginable. There can be absolutely no question of this, whatever Opposition Members may say while they remain in Opposition. With regard to the point about the "Buy British" campaign, there is a major difference between us and some of our competitors inasmuch as there is a natural nationalistic desire on the part particularly of the Germans and the Japanese to buy their own products. That desire does not, for various reasons which can be conjectured, appear to be developed here to the same extent. I assure my hon. Friend, however, that we are very well aware of this and that, in ways which I cannot publicise, we are seeking to take measures in this direction.

Is the Under-Secretary able to relate the import penetration to production figures in this country for the first three months of this year? Can he also tell the House whether his Department will be making representations to the Government about the new Mini development and its place in international trade?

I cannot closely relate import penetration levels and production in the first three months, particularly because, following disputes such as those we have seen, although certainly some sales are less and increased imports result, there may be a delay rather than a loss in other cases. The new Mini is a matter for my right hon. Friend the Secretary of State for Industry, and certainly close consultations about this are going on at the present time.

Will my hon. Friend liaise with his right hon. Friend the Chancellor of the Exchequer about the unfair competition which exists between those who sell British cars and those who sell foreign cars? Will he accept that there is a great economic and financial advantage to the car purchaser to take up an offer from Fiat, Datsun, Toyota and Volkswagen because of their low interest charges? Does he further accept that in this respect the position when buying from British Leyland militates very unfairly against the British car industry, and that this is one of the major factors in persuading the British buyer to buy foreign cars? Will he accept that it is simply a matter of economics and that there is unfair boosting from foreign Governments? Finally, will he deal with this situation?

The differential in interest rates makes a considerable difference, as my hon. Friend spelt out It is the Government's firm intention, as one of our central aims in our economic policies, to reduce the level of interest rates in this country. I do not think there can be any question of subsidising the interest rate in the way that my hon. Friend seemed to suggest, but interest rates have come down very considerably in the last four months and I hope that they will continue to do so.