ExpertEye European Automotive Report Q2 2016 | Page 26

United Kingdom – The uncertainty of Brexit
The Brexit announcement on 24th June sent shock waves around the

global markets with the European Commission, the IMF and others all
announcing cuts in the UK and global growth. Some companies have
also been accused as using Brexit as an excuse for cost cutting, with

Lloyds Bank the latest to announce further redundancies, but overall
the markets have thus far remained relatively calm. Even the IMF has

now moved away from its most negative views on the impact of Brexit
but there still remains a lot of uncertainty.

Private consumption remains the strong driver of growth and whilst
the ESI has fallen by 4.4 points since the end of last year this is still

less than the drop seen in Spain. Unemployment is already one of the
lowest in Europe and it is still falling adding to the generally positive

.
Economic Forecasts - UK

GDP growth (%, yoy)
Unemployment (%)

many manufacturers are targeting their captive finance divisions with
achieving over 60% pull forwards on the existing finance books.
European Automotive Report - 2016 Quarter 2

0.0

0.8

1.6

6.1

5.3

1.8
5.0

1.9
4.9

(3.4)

(2.4)

Current account balance (% of GDP)

(5.1)

(5.2)

(4.9)

(4.4)

Gross public debt (% of GDP)

125
120

88.2

89.2

89.7

89.1

RV Index: 36 months / 60,000 miles
Average

UK

115

100
95
90

2010 01
2010 04
2010 07
2010 10
2011 01
2011 04
2011 07
2011 10
2012 01
2012 04
2012 07
2012 10
2013 01
2013 04
2013 07
2013 10
2014 01
2014 04
2014 07
2014 10
2015 01
2015 04
2015 07
2015 10
2016 01
2016 04

loyalty and increase sales. The appeal of pull forwards is now so strong

1.5

2.3

(4.4)

105

forwards/early termination and renewals as a way to retain customer

2017

(5.6)

The PCH and especially the PCP market continue to drive significant

retail sales, manufacturers and dealers are now targeting pull

2016

Public budget balance (% of GDP)

110

increasingly popular. With PCP now representing over 80% of all new

2015

2.9

Inflation (%, yoy)

economic feeling.

growth in new car sales with maintenance packages also becoming

2014

Sources: European Commission – Economic Forecasts Experteye AG - RV Index
Bowkett Auto Consulting Ltd - Forecast vehicle sales

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