Brexit has brought on a lot of uncertainty in several markets, with the car industry being one of the most affected. According to recent reports by the Society of Motor Manufacturers and Traders, investment in the UK car industry has halved. Figures released by the organisation showed that spending in the first six months of 2018 was £347.3 million compared to £647 million in the first half of 2017.
The SMMT have also warned that time is running out for the government to offer clarity over issues like European trading conditions. Several car manufacturers are faced with the decision of building new cars in the UK or moving the operations overseas.
For example, BMW face the prospect of closing UK factories if they are unable to import components from Europe after England leaves the EU. BMW have invested around £2 billion in British operations since 2000.
Chief executive of SMMT, Mike Hawes said “there is a growing frustration in global boardrooms at the slow pace of negotiations. The current position, with conflicting messages and red lines goes directly against the interests of the UK automotive sector which has thrived on single market and customs union membership. There is no credible Plan B for frictionless customs arrangements, nor is it realistic to expect that new trade deals can be agreed with the rest of the world that will replicate the immense value of trade with the EU. Government must rethink its position on the customs union.”
Car industry investment figures are usually uneven because decisions on models by motor companies cause rises in spending data. But industry investment has slipped consistently since the Brexit vote in 2016. In 2015, £2.5 billion was invested, while it fell to £1.1 billion in 2017.
Over the years, Britain has won several important contracts, which include Toyota, Nissan and Peugeot. The contracts pushed the British car industry to a record level of production. Brexit might have caused a lot of uncertainty, but a decision will need to be reached to create a positive future for Brexit.
