BREXIT has dominated British politics for years now. With good reason, the UK’s car industry has been central to the debate.
Some of the biggest manufacturers in the world operate in Britain, and any impact felt by the auto industry is certain to be felt more widely, too.
What does the Industry Think?
A ‘no deal’ outcome would see carmakers revert to World Trade Organisation rules, meaning that import and export tariffs could come into force, alongside other non-tariff barriers like paperwork.
Many international carmakers have set up shop in the UK with a view to exporting to the mainland. A no-deal outcome would see much of this advantage disappear.
Car makers have invested more than three hundred million pounds in contingencies such as stockpiling in preparation for a short-term shock – and the longer uncertainty persists, the greater this becomes.
All of this has seen investment in British carmakers collapse, from nearly £2.5 billion in 2015 to just £1.3 billion in 2018. Britain is a global exporter of motor vehicles, with around 80% of vehicles made here eventually finding their way to foreign markets.
The industry supports 800,000 jobs, and thus is a critical part of the UK economy. A significant drop in output could see the UK’s economy lapse into recession. But it’s not all bad news – Jaguar Land Rover has committed around a billion pounds toward developing its electric cars in Britain.
What do Consumers Think?
Spending remains resilient among British consumers, for whom prophecies of an imminent cataclysm have begun to lose all meaning. Predictions of an immediate recession and widespread job losses in the wake of the 2016 vote to leave have proved wide of the mark, with employment rising since. Public faith in experts is thus at an all-time low.
And yet some hesitancy might kick in when the economic realities of a no-deal scenario set in. The weak pound is good news for an exporting industry, but not so much for consumers of vehicles made overseas.
Customers may need to get creative when financing their motoring purchases. They might resort to buying used more often, or to financing their purchases via a loan or a lease via a reputable company like Zenauto.
The latter option is a means of effectively renting a car over a fixed term of months and years, and then having the option to either buy outright at the end of the contract or to trade in for another car.
This approach would allow would-be car-buyers to wait out this critical period of uncertainty, and then make a purchasing decision when the political state of play becomes clearer.
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