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A referendum on EU membership was held on 23 June, 2016, and it was decided that the UK would exit the EU. The Government invoked Article 50 of the Lisbon Treaty on 29 March 2017, which set in motion the process of a negotiated departure from the Union over the next two years and beyond. This has created uncertainty in the market. Car assembly costs in the UK could increase significantly, leading some manufacturers inclined to move production out of the country. As of February 2019, Ford has publicly warned it might move production out of the UK due to Brexit, but has not officially announced this decision. Additionally, Nissan has recently announced that it’s new X-Trail will now be produced in Japan, rather than it’s UK plant in Sunderland. Toyota has also warned that it would suspend production in a no-deal Brexit situation. Finally, Jaguar Land Rover plans to cut 4,500 jobs, the majority of which are expected to be UK based employees. This comes on top of the automaker’s 1,500 other lay-offs in 2018. Overall, the only thing that is clear regarding Brexit and the UK automotive industry is that uncertainty permeates all predictions and decisions.
Brexit concerns facing the automotive industry hinge on the UK automotive market’s current integration with the EU. Key statistics that show this relationship are as follows:
- 65% of British-built components exported to the EU
The UK automotive industry will be affected by the ultimate outcome of Brexit negotiations. Special areas of concern to the industry include changes to customs, regulations, licensing, supply chain, and distribution.
There has been a surge in demand for eco-friendly cars in the UK, with some sources suggesting a large proportion of new car buyers looking to prioritize eco-consciousness over ‘style’. The UK saw an increase of more than 60% in sales of electric and hybrid vehicles in 2016. From January 2018 all new taxi cabs in London must be pollution-free and produce zero emissions. By 2020, it is estimated that half of the 22,500 black cabs in the capital will be electric as the current diesel vehicles are phased out.
Birmingham has the highest proportion of plug-in cars at 2.8%. The mini and dual-purpose segments saw greatest increases in registration, followed by the executive and lower medium segments.
Car manufacturing in the UK has declined slightly, specifically the count of cars built in the UK in 2017 is down 3% since 2016. In 2017 the UK automotive manufacturing industry turned over £82 billion,
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