Ineos Grenadier ‘almost certain’ to be built in France, not Wales

Billionaire Ineos oil boss Jim Ratcliffe has today driven his chunky new Grenadier 4X4 on its public debut in Britain – and revealed it will ‘almost certainly’ not be built in the UK.

In an exclusive interview with This is Money and the Mail Online, he said an agreement to make the Land Rover Defender rival at a former Daimler-owned factory in Hambach on the border of France and Germany is ‘pretty much’ decided, dealing a huge blow to Bridgend in Wales where the utilitarian car was originally pegged for production. 

Mr Ratcliffe – Britain’s fifth richest man – took to the wheel of an early prototype of the off-roader at the Concourse of Elegance at Hampton Court Palace, London, where he admitted to us it was the first time he had seen the vehicle in the metal.

Delighted by the reaction of the guests to his bruising 4X4, Ratcliffe said: ‘It’s brilliant. It’s the first time I’ve seen it. I’ve only seen it in clay model form up to now. It’s very exciting.’

Asked to describe the vehicle and its performance, he added: ‘It will end up 80 per cent Mercedes-Benz G-Wagon, but at half the price.’

Mr Ratcliffe, who is reportedly worth £12.15billion, according to Time Times’ 2020 Rich List, gave some additional insight into the development going into the 4X4, which was due to be produced in South Wales and create 500 new jobs for the UK motor industry.

‘We’ve got 200 German engineers down near Stuttgart working on it,’ the petrochemicals mogul explained.

‘The engine is amazing. And it’s great engineering. The doors close with a real clunk.’

When asked directly if the decision had been made to go for it, he admitted; ‘Pretty much.’ 

His words today will be a bitter pill for Bridgend. 

Ratcliffe had said last summer that the the 4X4 would come with a ‘Made in Britain stamp’ as it would be produced at a new ‘state-of-the-art’ factory in South Wales.

Not only that, Inoes Automotive even unveiled computer-generated images of how the plant could look at the site close to the Ford engine factory, which is due to close this month. 

However, the availability of a ready-made production facility in Hambach – close to the German border and near the German city of Saarbrucken in industrial Saar region – has resulted in plans to build in the UK being put on hold.

In a statement released in July, Ineos Automotive chief executive, Dirk Heilmann, said: ‘Overcapacity has long been a major issue for the automotive sector. 

‘Of course we considered this route previously, but as a result of the Covid-19 pandemic some new options such as this one with the plant in Hambach have opened up that were simply not available to us previously. 

‘We are therefore having another look – and reviewing whether the addition of two new manufacturing facilities is the right thing to do in the current environment.’

He added: ‘Covid has had an impact on our build schedules with ground clearing works and construction held up by the social distancing measures that have been required. 

‘Safety is of course paramount, but we also have an obligation to do what is right for the business – and so need to assess these new opportunities in order to maintain or improve on our timelines.’

Ineos said it would be reviewing its options in the next few weeks, though Sir Jim Ratcliffe’s comments suggest the deal is almost done. 

Bosses had estimated that Ineos Automotive would build up to 25,000 4X4s a year, which would have created 200 jobs in Wales initially, rising to 500 in the longer term.

Around 100 staff are already with its engineering partner MBTech at its centre near Stuttgart in Germany – just 140 miles from Daimler’s Hambach factory in eastern France.

The engines used in Grenadier will be six-cylinder petrol and diesel BMW powerplants, which would also be easier and cost-effective to transport to a production facility on the  French border rather than incurring import tariffs to ship to Wales post-Brexit.  

A sub assembly plant in Estarreja, Portugal, had also originally been planned to produce chassis and body components.

It was said to also create up to 500 more jobs n the longer term, but is now also at risk.

Speaking to This is Money, Ineos Automotive commercial director, Mark Tennant, said earlier this year: ‘Grenadier is absolutely going ahead. This is a re-affirmation of it going ahead. We are looking at something that was not previously available. It’s not something we are taking lightly.’

The fall-out from the coronavirus has been a factor for the consideration to switch to the factory in mainland Europe, but Brexit had not, he insisted – despite some industry skeptics seeing it as convenient cover for a hard-nosed financial move.

Mr Tennant claimed the opportunity of a ready-made site provided by Hambach was the driving factor, not Britain’s decision to leave the EU.

‘Brexit was not an issue,’ he said. ‘Brexit has not played a role.

‘We are looking to mitigate risk around timescale. There’s a lot up in the air about a second wave of Covid.’

Ineos owner, Ratcliffe, 67, has been a vocal supporter of Brexit, saying Britain would thrive outside of the EU.

In an interview with The Sunday Time in 2018 – shortly after he was knighted – he said: ‘The Brits are perfectly capable of managing the Brits and don’t need Brussels telling them how to manage things.

‘I just don’t believe in the concept of a United States of Europe. It’s not viable.’ 

However, today’s announcement could result in a public backlash against the petrochemicals mogul, similar to the one aimed at Britain’s richest man, Sir James Dyson, when he announced his intention to move production of his ill-fated electric car from the UK to Singapore, despite intensely backing the Brexit decision.

The electric SUV project was eventually shelved late last year after the entrepreneur said it was ‘not commercially viable’.

Mr Tennant said; ‘The Grenadier has got to be a strong commercial proposition. We have to look at existing capacity. We’re still in negotiations.’

If the Hambach option is concluded, production in South Wales and Portugal will not go ahead, he confirmed. ‘It’s a binary decision,’ he explained,

It was ‘too early’ to talk about any compensation or otherwise to the Welsh authorities who were developing the wider site for businesses, he added back in July. 

Mr Tenant said he was confident that, despite the delays caused by coronavirus, production at the end of 2021 and first sales in 2022 would remain on schedule.

‘Our aspiration is still to start production at the end of 2021 and have the Grenadier on sale early 2022,’ he told us.

The coronavirus pandemic has seen demand for new vehicles around the world slump and worsened problems affecting overcapacity, just as the sector pumps billions into electrifying its model line-ups to meet stringent emissions rules.

German carmaker Daimler has made the French factory available as part of extended efforts to cut costs. 

The site, which is the home of the smart EQ fortwo models, has been recently developed with a new dedicated SUV line, similar in size to the Grenadier.

Ineos bosses said this would be ‘ideally suited’ to the production of the 4X4, which is seen as the spiritual successor to the Land Rover Defender. 

Ineos bosses insisted they were not trying to exploit a grants merry-go-round by playing off one country against another, as other manufacturers have appeared to do in the past, but were looking to switch for purely commercial reasons. 

‘Grants are not the main issue. We are not playing games in terms of who can give us most support,’ Tennant explained.

‘Hambach has given us more options to minimise delays caused by Covid.

‘The main factor for Hambach is the opportunity to switch from a green field site to an existing factory with a trained workforce.’

He accepted that the prospect of a trained workforce at Bridgend in South Wales had been a big draw initially. 

He said Inoes had also looked at Hambach in the past, but ruled it out because at the time it did not have the capability to build 4X4s, Now it does, following a big investment in 2018.