Sportscar maker Lotus is considering ending production at its home in the UK in favour of setting up a new plant in the US, the BBC understands. Such a move would put 1,300 jobs at risk at its headquarters in Hethel, Norfolk. Lotus refused to comment when asked about any plans, which were first reported by the Financial Times, but sources within the company told the BBC the situation is under review and taking production to the US was under consideration. It comes after production in Hethel was temporarily suspended due to disruption caused by the introduction of tariffs on cars being imported to the US. America is a major market for Lotus but tariffs threaten its business, with US sellers required to pay taxes of 25% on imports of cars and car parts. Figures released on Friday for the UK's car industry revealed exports to the US had halved as President Donald Trump's tariffs caused some car makers to halt shipments. The UK government and Trump administration have agreed a deal to lower tariffs on UK-made cars entering the US to 10%, but it is not due to come into force until the end of June, meaning manufacturers have had to pay the higher rate to date. Lotus is majority owned by the Chinese group Geely, which is in the process of reorganising its diverse portfolio of car brands, which also include Volvo, Polestar and Lynk and Co. The company currently builds cars in Norfolk and in Wuhan, China. Lotus was founded in the early 1950s by engineer Colin Chapman, moving to Norfolk in the 1960s. In April, the carmaker announced 270 jobs would be cut "amid volatile and evolving market conditions including the US tariffs". The decision followed previous job losses last year, but the company said it remained "committed to the UK" and that the restructuring was "vital to enhance our competitiveness". President Trump has raised taxes on various goods entering the US in recent months in an attempt to encourage businesses and consumers to buy more American-made goods. Car shipments to the US already incurred a 2.5% tariff, but now face higher rates. However, if a deal with the US had not been reached, UK exports would have been taxed at 27.5%, as opposed to 10%. The lower tariff only applies to 100,000 British cars being imported to the US per year, which matches the number of vehicles the UK exported across the Atlantic last year.
Lotus considering shifting UK production to US
TruthLens AI Suggested Headline:
"Lotus Evaluates Potential Relocation of Production from UK to US"
Bbc News
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TruthLens AI Summary
Lotus, the renowned sportscar manufacturer, is contemplating a significant shift in its production strategy by potentially relocating its operations from the UK to the United States. This move could jeopardize approximately 1,300 jobs at the company's headquarters located in Hethel, Norfolk. Although Lotus has not officially commented on these plans, sources within the company have indicated that the situation is currently under review. This consideration follows a temporary halt in production at the Hethel facility, which was prompted by the introduction of tariffs on car imports to the US. The tariffs have created financial strain for Lotus, as US dealers are subjected to a 25% tax on imported vehicles and parts, significantly impacting the company's competitiveness in a crucial market. Recent data from the UK's automotive sector revealed a drastic reduction in exports to the US, which have halved since the implementation of these tariffs under President Trump's administration, leading many manufacturers to suspend shipments altogether.
The implications of this potential shift are further complicated by ongoing negotiations between the UK government and the Trump administration aimed at reducing tariffs on UK-made vehicles entering the US. A new agreement has been reached to lower the tariffs from 25% to 10%, but this change is not set to take effect until the end of June. In the interim, UK manufacturers, including Lotus, have been burdened by the higher rates. Lotus, which is majority-owned by the Chinese automotive group Geely, has been undergoing a restructuring process amid volatile market conditions, including the impact of US tariffs. In April, the company announced plans to cut 270 jobs as part of its strategy to maintain competitiveness. Founded in the early 1950s by Colin Chapman, Lotus has a long history in the UK automotive industry, and while it has expressed a commitment to remaining in the UK, the current economic pressures may force a reevaluation of its operational base in favor of more favorable conditions in the US market.
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