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What does Brexit mean for the motor industry?

Published: 30/06/2016 | AUTHOR: Andrew Andersz

EU referendum and the motor industry

It’s been a week of ups and downs for the UK but, as the dust settles, what does Brexit really mean for the future of the British motor industry? Here our Automotive PR Director Andrew Andersz shares his insight.

The future of the UK motor industry

The motor industry is one of the UK’s success stories yet its future wellbeing hardly got a mention during the months of debate leading up to the EU referendum. Its success is largely based on the vehicles it builds for sale throughout Europe but the vote for Brexit could mean its considerable contribution to the UK’s economy could be compromised.

In the early 1990s Jacques Calvet, the then head of PSA (maker of Citroen and Peugeot vehicles), famously referred to the UK as Japan’s fifth largest island and called it ‘the Japanese aircraft carrier off the coast of Europe’.

Following lobbying by the major European car manufacturers, the Japanese had agreed to voluntary export restraints to limit their market share in Europe. The investment by Honda in Swindon, Nissan in Sunderland and Toyota in Derby was designed to get around such trade barriers.

Last week’s vote for Brexit has effectively cast the Japanese aircraft carrier adrift. And it might have been cut adrift by its own employees with Derby, Sunderland and Swindon all voting for Brexit.

If negotiations to enable the UK to exit the Europe ‘project’ result in the imposition of import duties for British-built goods, then new models are now unlikely to be built in these factories in years to come.

This doesn’t just apply to the Japanese. Followers of Vauxhall’s fortunes will be well aware that Ellesmere Port has had to fight other General Motors plants in Europe for investment for each new Astra model in recent years. Unlike the Japanese, GM has other options already in place and could use the Brexit vote as an excuse to close the plant. The residents of The Wirral voted for Brexit.

Mike Hawes, SMMT Chief Executive has said: “The British public has chosen a new future out of Europe. Government must now maintain economic stability and secure a deal with the EU which safeguards UK automotive interests. This includes securing tariff-free access to European and other global markets, ensuring we can recruit talent from the EU and the rest of the world and making the UK the most competitive place in Europe for automotive investment.”

The car plants in Derby, Ellesmere Port, Sunderland and Swindon produce nearly 1 million new cars each year. Failure to safeguard UK automotive interests could threaten their very existence with the loss of tens of thousands of jobs at the plants and at suppliers and local communities serving those plants.

Thursday, 23rd June will be remembered for many reasons, some good and some bad.

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