Jim Ratcliffe’s Ineos mulls making Land Rover rival in France

Ineos Grenadier - MAGROUND GmbH
Ineos Grenadier – MAGROUND GmbH

Sir Jim Ratcliffe may abandon his plan to build a new off-road vehicle in the UK, ending the dream of a new British car manufacturing business before it begins.

His company, Ineos Automotive, is in talks with Daimler about buying its car plant in Hambach, France, to make the Grenadier.

Sir Jim has previously spoken of his desire to make the new car – which has been billed as the spiritual successor to the original Land Rover Defender and was unveiled last week – in the UK.

In September Ineos – which has put almost £1bn into developing the Grenadier – unveiled plans to build a factory to produce the vehicle in Bridgend, south Wales that would eventually employ about 500 people.

Work with the Welsh government had already begun on clearing the site in preparation for construction.

Similar activity had begun at a sub-assembly plant in Portugal, which would also create about 500 jobs.

However, Ineos said that “opportunities thrown up by Covid-19” meant that it was now investigating a deal to buy the Hambach plant from Mercedes-owner Daimler. It emerged the factory, which builds the Smart car, was up for sale last week. 

Sir Jim Ratcliffe revealed plans for the car at a pub called The Grenadier, where he first came up with the idea
Sir Jim Ratcliffe revealed plans for the car at a pub called The Grenadier, where he first came up with the idea

If a deal is agreed, the Welsh and Portuguese sites would be abandoned, with all production work on the Grenadier taking place in France.

Mark Tennant, commercial director at Ineos, said: “We are in talks about the potential acquisition of Hambach from Daimler. It is a fast-moving situation and there is no final decision yet but we have put on hold the return to work at the Welsh and Portuguese sites.”

Sir Jim had praised British automotive expertise when he revealed plans for the Grenadier in 2017 and talked about his hopes of building it in the UK.

However, Mr Tennant added: “ UK construction is one thing we talked about and what Jim said was we would love to do it if it makes sense. However, it is a commercial proposition and has to be from beginning to end.

“We are comfortable with the UK and Portugal from a manufacturing point of view but the environment has changed, and using the Daimler plant is something we need to look at because it has commercial merit.”

Even before coronavirus sent car sales plummeting there was huge over-capacity in the European car industry, with under-utilised plants at risk of being closed.

Ineos taking on an existing plant could reduce costs of building the Grenadier. 

Hambach was recently kitted out by Daimler to build a large SUV, which could be an attraction for Ineos.

Mr Tennant said that Ineos still planned to have its manufacturing facilities up and running by late 2021, with sales of the car starting early in 2022.

Changing the company’s plans could be “a risk to timing” he said, adding that Hambach is an “additional opportunity that just wasn’t there before Covid”.

Production of the Grenadier could also be delayed by chaos in automotive supply chains caused by the pandemic. 

There are concerns that lockdowns and collapses in demand for car parts caused by coronavirus could mean suppliers failing, forcing Ineos to source components from alternate companies.