Brexit – The fall of car sales?
There is a predicted decline in sales according to reports from KPMG. They predict that 2017 will lead to a decrease in overall car sales and this is feared to be true in light of the recent EU referendum, which saw the UK leave the EU.
The UK’s motor industry supports 800,000 jobs and many of these wished to remain in the EU, rather than leave it. Indeed, a recent survey carried out by the industry representative reported that 77 per cent of its members actually opted to stay in the EU rather than leave it. The survey also takes into account the opinion of both large business and smaller business, which means that the survey is not skewed towards one particular sector. The question we therefore have to ask is why are so many car dealers so concerned with the “Brexit”, and is there any rational explanation as to why so many opted to remain as a member of the EU?
Well, quite simply the answer to this question very much resides within how dependant the motor industry is on the EU trade agreements. For example; 11.8 per cent of all the combined UK exports are from the motor sector, and the majority of these end up within Europe.
With this explained, it is a bit easier to understand why so many within the motor industry were nervous in the build up to the EU referendum.
In the wake of “Brexit”, Mike Hawes, SMMT chief executive, 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.’
Global sales and marketing director at BMW, Dr Ian Robertson reported on the result of the referendum this week. He stated that ‘It’s very simple. We have no plan B. We will continue whatever the result and consider our next steps then. There’s no immediate issue. The UK is our fourth biggest market.’
Though, it must be stressed that with this information in mind, there may also be an argument against all of the Brexit fear. Ian himself stated that the UK is a huge part of the Motor industry, especially within the importation, exportation, trade and transportation of BMW cars. Thus, it only makes sense that the possibility of unique trade agreements is not so far-fetched after all. With the implementation of unique trade agreements, there is a possibility that the “Brexit” may even lead to trading negotiations that end up better off for both us and Europe, with cheaper tariffs and subsequently, more revenue generated for the Industry as a whole.
Whatever the case, it is almost impossible to predict the future, and as much as economists and experts can plan for what may be ahead, only time will tell whether the UK’s exit from the EU will benefit, or harm the motor industry.