How pivotal is Brexit for the British car industry

Brexit causes the automotive industry in an uncertain disruption for the future of £82 billion British car industry, which lies in the hands of our country leaders and the EU. With such a significant amount of investment at stake no having the right deal could end up in plants closing down.
Unipart an automotive supplier fears and says’’ Brexit has the potential to hit the industry with more severe devastation than 1970. Tariffs after Brexit will be wrong, even worse would the excellent timing of parts getting delivered from the supplier to the manufacturer as they would be held up for checks at the UK and Europe borders.

British car industry is already experiencing a slump from a record of 1.92 million vehicles made since 1970’s to 1.9million cars last year. There could be more decline in numbers if the situation stays the same or if changed to more worse.

Fears are not just the production of vehicles, but also production plants could be shifted from Britain too. All this has happened through self-inflicted harming decisions which could severely damage the automobile industry.

Ralf Speth , Jaguar and Landrover CEO , has already stated that if the right Brexit deals were not out into place, could cost the company in £1.2 billion in lost profit every year, which means cut down of jobs , closing of car manufacturing plants, which won't just be sad but will inflict grave number in job losses. Already jobs have been cut down at Vauxhall in Ellesmere port, Jaguar land in Solihull and Nissan in Sunderland.

Deisel crisis is another major issue for all automobile companies which is a substantial current issue in the markets. More than 90% of land rover car sales are in diesel, and the demand has already fallen by 9% in the first six months in the year 2018. Questions are being asked to the government for backing up its support towards the public opinion of ‘ diesel equals dirt.’

Positive effects of Brexit on the UK car companies

Brexit will make a British car makes to look for British car parts makers for cost-effectiveness, which would help boost UK car parts industry. As per current statistics shows a vehicle built in the UK uses 44% of car parts made in the UK. Uk car parts manufacturer can expect high competition in demand for parts compared to an EU car part maker due to lack of tariffs and time consumption in receiving the components due to stricter border controls.

Car companies could try to convince EU car part manufacturers to build plants in the UK so that their car production and sales are not affected by Brexit. As of now, sports care makers are already benefiting from the value of euro dropping due to Brexit.

Demands of UK car makers from Brexit
• Free trade
• No tariffs
• Trading should be the same to keep up the pace of car manufacturing as till now.
• Access to the single market as now.

54 % of UK built cars are sent to EU countries, and with tariffs, it would add an extra £1.8 billion towards exporting costs, automatic hike in car prices, the percentage of sales going down, extra £3billion has to be paid to bring cars in from Europe. Ford is already facing a downfall in car sales because of Brexit. Sterling would lose its value ultimately affecting the UK and European business on the whole.

How the UK proposal to the EU looks?

We have single market access and follow the same customs rules while maintaining the Brexit rules. No changes in trading and everything remains the same as before, Tough rules on hiring foreign national to work in the UK will be the only change.

The UK government demands the same benefits even if Britain leaves The EU, but as EU stands that rules will not change, whether it is hard or soft Brexit and most likely EU will not accept this proposal.

As of now nobody knows the end decision but not long before the decisions will come out as the decision time closes in.

What do you think ?

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