Brexit Vs. The Car Industry

How has the UK leaving the EU affected the car industry and the giant companies within?

How exactly will the ‘b-word’ affect our beloved motoring industry? Some of the biggest brands in car manufacturing have already changed their plans to fit around Brexit, whereas others have made little to no changes in the way they operate.

Furthermore, analysts and business journalists have been speculating all the various ways that Brexit could affect the motoring industry as a whole, claiming that billions of pounds could be lost, or gained, depending on who’s writing!

Let us, the best motoring site in the galaxy, to tell you exactly what’s going on.

Honda announces future closure of Swindon plant

Early last year, Honda went on record to announce that its Swindon car plant will close in 2021 and the 3,500 jobs that come from said plant will be lost. The Swindon plant is Honda’s only factory in the EU and around 160,000 vehicles are produced in that plant each year.

This sudden move’s relation to Brexit is unconfirmed as Ian Howells, senior vice-president for Honda in Europe,  totally denied Brexit’s influence:

“We’re seeing unprecedented change in the industry on a global scale. We have to move very swiftly to electrification of our vehicles because of demand of our customers and legislation.

“This is not a Brexit-related issue for us, it’s being made on the global-related changes I’ve spoken about.”

“We’ve always seen Brexit as something we’ll get through, but these changes globally are something we will have to respond to. We deeply regret the impact it will have on the Swindon community.”

Very interesting indeed. Was the timing of Brexit and Honda’s UK exit just a coincidence?

Nissan says post-Brexit Britain ‘would not be viable’ without a free-trade agreement

Nissan’s Sunderland plant could face a similar fate as the company gives off a stark warning that without a suitable free-trade agreement, Nissan would struggle to continue to operate as they currently do in the UK.

In the case that a free-trade agreement isn’t met and a 10% tariff on cars and parts is put into place, it could ruin the company’s entire European strategy.

Gianluca de Ficchy, chairman of Nissan Europe said “We would not be viable,” and “We just wouldn’t be able to sell our cars.”

Sunderland is the UK’s biggest car plant and also is responsible for around three-quarters of the company’s European output.

Ford says no-deal Brexit will make them reconsider UK investments

Although we’re a little closer to getting a deal than we were last year, things are still uncertain and in the case that the UK leaves the EU without a deal, Ford warns that it could be disastrous for them.

In this case, Ford “will have to consider seriously the long-term future of our investments in the country,” as said by Mr Armstrong, Ford’s Europe Chairman.

“We’ve been very consistent since the referendum that a hard Brexit, a no-deal Brexit, would be a disaster for the automotive industry in the UK and within that of course I count Ford Motor Company,”

“So anything that puts tariffs or friction at the borders in place would be a significant inhibitor to our business. We’ve been very clear in saying that could cost us up to a billion dollars a year.”

BMW could be forced to put workers on prolonged unpaid leave

BMW may have to place workers at their Oxford plant on unpaid leave for two weeks in the scenario of a no-deal Brexit.

The original plan was to place workers on leave from 31 October, when Brexit was meant to happen. However, fortunately, the Oxford plant didn’t close on that date as Brexit didn’t happen until January.

Although BMW didn’t place their Oxford workers on unpaid leave, BMW have announced that they will have to postpone the launch of their new Mini models due to Brexit uncertainty. This was announced at the end of January 2020 where BMW spokesman Maximilian Schoeberl said:

“The lifespan of this platform has been extended…For cost reasons and because of Brexit.”

The current Mini hatchback has been on the market since 2014 and was due to be replaced soon, but now I guess we’ll have to wait a little longer.

UK manufacturers turn to the government for help

Most recently, the trade body for the UK’s car manufacturers called on the government for support in the upcoming March 11 budget. This followed a reduction in output seen in January of 2.1%.

“The upcoming Budget is an opportunity for the government to provide supportive measures to stimulate the market, but the biggest boost would be the agreement of an ambitious free-trade deal with Europe,” said SMMT CEO Mike Hawes.

“This would end the ongoing uncertainty and help the UK to recover its hard-won reputation as a great place for automotive investment.”

We’ll have to wait and see whether the government listen to automakers’ suggestion.

So, as you can see, the roller coaster ride that is Brexit has been just as turbulent for the UK car industry as it has been for most other affected industries. We’ve seen over the past year how various car companies, from Honda to JLR, have had to think and rethink again about how they’re going to deal with all the uncertainty that comes with the UK leaving the EU.

They’re all holding their breath for Boris Johnson to finally achieve a deal and successfully leave the EU with a free-trade agreement in hand. Until that day comes, expect to continue hearing about how these car companies will have to close their factories, lay off employees and postpone their next line of cars. It’ll all be over soon! Probably…

Let us know your thoughts on the matter in the comments!

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