Unless you’ve been hiding out in a cave for the last 4 years, you’ll probably think you’ve heard it all when it comes to the subject of Brexit. The UK left the EU on January 31st and there’s already a whole host of issues still to be resolved; especially within the car industry. What impact will this have on the industry, and how will the already-struggling automotive sector move forward?
We’ve left, but so have they…
Since the 2016 referendum, many major car manufacturers have had itchy feet about their UK Production. Back in 2019, Honda announced that they’d be closing their Swindon branch by 2021, choosing to focus their resources on electric car markets falling outside of the UK. Recently other major manufacturers such as BMW, Ford, Renault and Vauxhall have all attempted to compete with the success of US electric provider Tesla for a share of the UK market, each with varying degrees of success. The overwhelming success of the Model 3 (which was Britain’s third most popular new car last August) has illustrated the rise of the Electric Vehicle and has also caused many of the established manufacturers to rethink their UK activity altogether.
The importance of a trade deal
The process of negotiating trade deals with the EU (and countries further afield) has yet to be done. This process is especially important for the automotive sector, as currently 54.8% of UK car exports are sent to the EU. A deal minimising friction at the border, as well as promising cooperation and minimal tariffs, is vital for a smooth transition during this period. It goes without saying that a poor deal which doesn’t touch on all of these areas for concern could prove to be catastrophic.
The future
What’s to come over the course of the next decade for a sector currently surrounded in uncertainty? It seems likely that investment will be needed in the Electric Vehicle area, with battery factories being mooted as a potential touchpoint for the future. On a positive note, it seems UK specialists such as Bentley, Rolls-Royce and Aston Martin will be able to continue to operate, as there’s still a huge market for these vehicles due to their bespoke nature of design and ‘Made in Britain’ brand power. If you’d like to find out more on current trending car industry topics such as this, take a look at the blog section of our site where you’ll find a variety of subjects you can read up on.
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