Automotive industry hit by 9% Brexit cost
A new white paper has found that the automotive industry in the UK has lost nine per cent of its volume since the Brexit vote.
The paper, entitled Death by a thousand cuts: The strategic outlook for the UK automotive industry beyond Brexit, has been published by Matthias Holweg, automotive expert and professor of operations management at Saïd Business School, University of Oxford.
It further warned that if the UK ends up leaving the EU without a trade deal, the UK could lose a further 35% of its current production volume over the next 10 years.
The paper also said that a customs union ‘compromise’ could further damage the automotive industry, because volume car production cannot be sustained under a WTO tariff regime, and a customs union would make UK plants less competitive. He also warns that the resulting damage to skill and supply bases could also have further adverse effects on aerospace and defence manufacturing.
Matthias said, ‘The great and present danger is that the decisions on where to produce new models will continue to go against the UK, until existing plants here become sub-scale and thus uncompetitive, and will close. This would invariably lead to a hollowing-out of the UK’s component supply chain, effectively condemning the automotive industry to a slow ‘death by a thousand cuts.’ Whichever way one looks, it is hard to underestimate the threat Brexit represents to the future of UK manufacturing.’
