Ever since the 2016 referendum on Britain’s membership of the European Union, Brexit has become a scapegoat (both real and imagined) for all sorts of problems affecting the country and the continental community. But one industry, in particular, has led much of the opposition for the past three years: car manufacturing.
Beginning with vocal dissent (and outright panic) from Japanese company Nissan, which promised to build the new version of its popular Qashqai model in Sunderland, Brexit’s detractors now include much of the European automotive industry. But how did cars become such a powerful symbol against a no-deal Brexit in particular?
Nissan’s dire warnings for British manufacturing stem largely from the fact that a no-deal Brexit would place an additional 10% export duty on new cars, as, with no assurances from Europe, the UK would have to buy and sell under World Trade Organisation rules. The company makes 440,000 vehicles in Sunderland annually, with the vast majority of them sold on the continent.
The European Automobile Manufacturers Association notes that 80% of all British-made cars (from all manufacturers) are exported, compared to just 40% of those built at plants in Europe. Here, the impact of Brexit on the car industry is plain.
Consumer watchdog Which? reports that many car makers have offered to price-protect sales that occur prior to the UK’s departure from Europe, which is expected to happen at the end of January 2020. Bookmakers continue to debate the departure date among themselves though, with no-deal Brexit odds and departure date markets running right into 2022.
Vauxhall, Peugeot, Citroën, Ford, and many of the German brands (BMW, Volkswagen, etc.) have pledged to freeze current prices for as long as possible but the American giant Ford notes that duties will add £1,000 – 2,000 to each car purchase made post-Brexit.
The looming threat of Britain’s departure has already produced significant damage to the manufacturing economy across Europe. Investment in the car industry has plummeted from £2.5bn to a paltry £90m since 2012 according to the Independent; a slump that has caused problems for local workforces.
Ford plans to close its Bridgend plant in 2020, while Honda, already facing a logistical nightmare with factories based in non-EU state Turkey, will abandon its Swindon factory a year later. According to some experts, it’s not entirely Brexit’s fault though. Everything from EU elections to waning interest in diesel cars has pushed the automotive industry into cost-cutting measures.
The growing popularity of electric and autonomous vehicles will continue to force seismic changes to the car industry well into the future too.