About How Brexit Affect The Uk Automobile Manufacturing Sector

The UK’s decision to break away from the EU could potentially cost automotive producers over 2,8 million sales over the next two years, according to a report carried out by IHS Automotive .. The report by Autonews predicts this year alone a fall of more than 200,000 in worldwide vehicle deliveries, a phenomenon which is only caused by Brexit. The decline is expected to rise to 1.25 million in the next year and 1.38 million in 2018.

Although other markets will feel this impact, the UK is expected to bear the brunt of IHS Automotive Analyst Ian Fletcher.

The automotive industry in the UK was expected to rise by 3.2 percent at the beginning of 2016. Because of Brexit, however, growth could decrease by 1 percent by the end of this year and may fall even further in the next few years.

The biggest losers, of course, are UK-based firms, and international car makers with national vehicle manufacturing plants. University was commonly regarded as a strategic position for entering the majority of the European markets before Brexit.

As a result , a large number of companies, including the world’s largest motor vehicle manufacturer, Toyota, were founded with Avensis and Auris factories. Unfortunately, they now have to pay taxes up to 10 percent on these two models, which could then force them to increase prices or reduce the cost of production dramatically.

Ford and General Motors also share the same fate as Toyota, Renault, PSA, Peugeot, Citroën and Honda in their statement released by Ian Fletcher. Ford and Volkswagen, two major importers of cars, also experience a severe threat from of the collapse of the pound against the Euro.

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It is the only way they will reduce the number of cars on the UK ‘s market and then focus on restoring lost revenue and capitalizing on other European markets.

One business that can be significantly impacted is BMW, which sells more than 11 percent of its cars in the UK, according to the Wall Street Journal. The progressive loss of pound value may lead to higher selling prices, thereby locking off some prospective buyers.

The auto industries are one of the most vulnerable sectors to potentially negative losses caused by Brexit as the UK manufactures four out of five vehicles for sale, all of which are shipped to the EU. While we are considering postponing the Brexit date, there remain at least three choices on the table for how Brexit might conclude: soft Brexit, hard Brexit but no-deal.

In short, Soft Brexit is a restricted tariff and regulation deal. Hard Brexit and no-deal have essentially the same impact on our subject. With this in mind, for a tough Brexit or no-deal, the United Kingdom will face two kinds of obstacles: tariff and non-tariff. Information about various choices can be read here. You may ask at this point which choice fits for the automotive sector and the response is ‘none of those.’

In an open statement regarding Brexit, one of country’s biggest trade associations – the social system of engine Manufacturers and Traders ( SMMT), states that automotive industries should retain access to the single market, maintain the same regulatory policy and access to EU workers, and continue to be part of the regulating process. By fact, the automotive industry wants to maintain it as it is today. And there are many explanations why, one by one, let’s test them.

Possible strategies required to cope with the risk of BREXIT:

1. Keep calm and stay constant

The reaction in the knee to insecurity often takes a wait to see stance or, worse, panic. Fears of a deadly force of domino effects of the European Union in the post-Brexit area are unfounded. Knock-on tremors may be felt elsewhere in Austria or the Netherlands, but this decision can, in contrast to this disturbing scenario, be a welcome wake-up call to many other countries outside the UK, accelerating much-needed reforms within the European Union. This is first of all a political question and secondly a financial sector question — it’s harder to measure the impact on the real economy. The UK is likely to see a recession but it is less likely to have an impact outside its boundaries.

The best response for companies is to stay calm and to proceed – until it is shown otherwise, it is pretty much business as usual.

2. Recall that the UK labor market is strong

In 2016, the UK labor economy in general performed well up to now. This outcome of the referendum happened at a time when the UK has the largest number of jobs in years. Underemployment is almost 5%, and the number of employees is 74%, nearly 10% better than in the USA. On paper, the UK economy is one of the healthiest in Europe, including around the world, which naturally suggests that Brexit is more than just the economy. I will return back to that. I will come back to that.

3. Protect UK brand employer

With the world’s eyes on Britain and Europe, employers will play a part in protecting Brand UK. Brexit ‘s vote indicates that the UK is not the enticing and accepting location for eligible talent for decades, that is far from true.

The mobility of talent was key in helping companies find qualified, especially in the infrastructure and hospitality industries, with one in ten doctors in Britain immigrating from the EU, 10% working in production and 14% working in food and shelter. This free movement of labor is one of the EU’s basic tenets and employers who rely on skill as a major economic differentiator must ensure that this is retained by others in the UK today and those who want to be in that country in future.

4. Fill the great distance

The much-discussed divisiveness of the demographic has just taken place before our eyes. Over over a decade, most developed economies have incomes stagnating, but averages can be deceptive. The Haves, for example, with the in-demand skills in IT and engineering, also saw costs rise during the recession. With low or outdated skills, the Have Nots saw salaries stand or decrease. Since 2008, the growth of UK wages has shrunk to half the normal pace and almost stagnant productivity. Too many people are looking ahead and are unable to see how their circumstances can change.