We awoke this morning to the news that Britain had voted in favour of leaving the EU and following that came a tidal wave of uncertain members of the public calling for answers to the question: what now for car leasing and the automotive industry?
With all of the turmoil surrounding the event it seems the facts of what will happen next have been clouded and are even uncertain while the nation recovers. In the calm of the aftermath we have looked into how Brexit might affect the British car industry and the predictions industry officials have made for the future.
Who is saying what?
Before the referendum took place reports were mixed about the future of the UK car industry, some claiming it would fail due to international manufacturers moving their plants out of the country, and others saying we’d have access to the global market which could increase our sales range and ultimately our profits.
Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT) has reacted to the result of the referendum, he 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.”
Previously, Mike Hawes had warned against us leaving the EU, claiming that, “We want this success to continue rather than jeopardise [the UK automotive industry] by increasing costs, making our trading relationships uncertain and creating new barriers to our single biggest and most important market, Europe. Remaining will allow the UK to retain the influence on which the unique and successful UK automotive sector depends.”
However, Mike said before that that “UK Automotive is globally competitive, securing record levels of investment…and exporting to over 100 countries,” which begs the question of why we need to retain EU custom at all costs if we can export to other international countries.
The SMMT conducted an internal survey of its members to find out whether they believe remaining in the EU would be best for their business. It was revealed that 77% believed that remaining in the EU would be best for business, with 14% undecided and 9% voting that leaving the EU would be best for business.
Obviously these figures are irrelevant to the current situation, but it does raise some questions about what safe-guards have been put in place so that Britain doesn’t lose a valuable sector of its custom.
What might it affect?
As Honda, Jaguar, Land Rover, Mini, Nissan and Toyota all have factories in the UK providing over 800,000 jobs, it is critical that these companies don’t choose to leave Britain, as not only could it cause a ripple effect with other industries, but also it could leave us with fewer business options in the future, as well as a huge number of skilled workers unemployed.
Gerry Keaney, Chief Executive of the British Vehicle Rental and Leasing Association, said “The British public has chosen a future out of the EU, and like most businesses, the fleet industry will need time to assess the ramifications of the referendum result.”
She also went on to say that, “for its part, the association will be working closely with UK and European policymakers to ensure that the exit process has a minimal impact on members and their customers. We remain confident that BVRLA members will adapt – after all, our sector is very experienced in dealing with challenge and change”. It seems then that industry leaders have different approaches to our new reality.
Other aspects of the industry that could be affected by UK exit from the EU are fuel prices and car insurance, namely, fuel is likely to go up and down along with the current instability and weakening of the pound against the dollar and car insurance policies further in the future may not cover driving your car in Europe. But, these things are pure speculation at this time and are merely aspects of Brexit to consider.
It would be extremely hasty to assume that anything good or bad has already come from the results of voting yesterday and the subsequent result of the referendum. Crucially, we as a nation must pull together in order to move forward and become strong independently, and that means doing our own research, forming our own opinions and not relying upon a handful of media bodies or public figures to scare or bully us.
Remember, we’re called Great Britain for a reason, so let’s live up to our name and make the most of the opportunity we have to build a solid future for generations to come.