Brexit impact more ‘visible’ as the UK motor industry feels the heat

The impact of brexit is getting clearer as the UK motor industry braces for tough times ahead

Brexit is coming, and coming hard. At least, it seems to be so as far as the UK motor industry is concerned. And, it is not without reasons, as data by Society of Motor Manufacturers and Traders (SMMT) suggests.

With this, an unemployment crisis in the motor industry is imminent, driven by decisions by the top names in the industry looking for cuts in their future investment plans, due to brexit because of the anxiety over future trade relations between the UK and the EU.

As a result, the motor industry is shimmering, courtesy, a heavy downfall in investments in the industry in 2017 compared with the previous year. While 2016 saw an investment amounting to £1.66 billion, investments in the current year stands at a meagre £647.4 million so far this year, translating into a 50% drop in terms of investments made in the UK motor industry.

Together, all this means a number of plant closures and job cuts in the industry. Names leading the pack are Vauxhall and Ford – the two top names in the motor industry. The major car makers are planning to drastically cut investments amid rising brexit uncertainty which would lead to the big ‘car crash’ for the UK motor industry. So, brexit is having a real hard impact on the UK motor industry, and it is getting visible now – and clearer.

These developments, as anticipated, are in line with the predicted impact of brexit on investments and imports. Hard Brexit will cost the car industry £2.7bn a year on imports, while it would mean a loss of £1.8bn on exports.

Among the top names, Vauxhall has already shown the way with its planned job cuts. The car maker plans to cut 400 jobs at Ellesmere Port in Cheshire by Christmas due to falling customer demand, as cited by the company. At present, there are 1,800 employees with the company at its Ellesmere Port facility. Although, the company states its commitment to the facility, more cuts are anticipated, according to industry sources. There are fears as well surrounding ‘Astra’ as its production at the place may be discontinued from 2021.

The car maker is closely followed by another industry big – Ford – which is feared to be going the same way.

Meanwhile, PSA Group – the French company that bought Vauxhall this year, has said that it is not in ‘a position to consider future investments’, in part because it does not have ‘enough visibility on the future trading relationship with the EU’. Accordingly, more plant closure decisions by PSA Group are expected by industry experts. However, sources are not sure whether that would include the company’s UK locations. But, certainly, brexit is not going the UK motor industry’s way – at least for now.

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