Brexit shock starts impacting the UK car industry

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The shock of potentially departing from the European Union has started impacting heavily on the car industry in the United Kingdom. Vauxhall has cut a lot of jobs and Jaguar Land Rover has also revealed plans of reducing its production due to the uncertainty of Diesel caused by the Brexit. The worse fear of union bosses is that this may only be the beginning.

Also Read: Car Companies’ Stocks Plummet After Brexit Vote

Many people in the industry also believe that this may be only the starting of a huge chain of disruptions that will be triggered by the United Kingdom’s vote to leave the European Union. With the separation from the European Union tariffs and other hurdles that arise in regular trade could be a disastrous factor that may disrupt the car manufacturers greatly. This is because parts of a car move across multiple borders several times during the process of manufacturing.

Take the manufacturing routine of BMW Mini as an example. The crankshaft for the engine is manufactured in France, which is then shipped to BMW’s UK Engine Plant Hams Hall located near Birmingham. Then that shaft is moved to Austria for engine assembly, which is then again moved to Oxford.

This is a very serious situation where the trading relation of the UK with other countries may never remain as it is right now. All of this free transportation around the borders, Tariff-free manufacturing and a lot of other vital factors are at stake as the UK government tries to figure out the kind of trading relationship it wants with the other countries of Europe after this massive departure.

Between all this, The Labor Party (funded by the unions that are hard on protecting jobs in the industrial sectors in the UK) that voted heavily for Brexit are also trying to figure the kind of deal that the UK should strike with other countries of Europe if Brexit is finalized and the United Kingdom takes its lead from the EU.


Notable Replies

  1. Your post suggest that the deal is up to UK which is false, it is up to Germany, France and other major players; what deal they offer UK. Britain is at the losing end. As they begged to join EU and then kicked off saying we are too good for you. If France and Germany has a little national pride (which they have a lot of) they will make UK regret crossing them.

  2. Please get your facts straight. Labour party is the opposition part in the parliament, they were the ones who were opposing brexit.

    Furthermore British Car industry is dead since the early 2000's, All major British automotive manufacturers are owned by German's, and French, Vauxhall in your case is owned by the PSA Group. They are not manufacturing anything here, just assembling all the components together.

    Brexit is surely going to develop a lot of logistical issues, But its now upto the people in Brussels to deal with all of it, Britian can not negotiate for it self.

    Btw Britain is now only known for its engineering consultancy, i.e design, CAE, and quality testing.
    Here they just design the different components, use cae simulations to test/ validate there designs, send it off to 1st teir suppliers for manufacturing and then do the actual physical testing of the finished product before job 1.

    I am speaking from my own experience, did bsc automotive engineering from oxford brookes and now completing my msc in automotive engineering from Coventry(JLR and AMG-HPP use our university for all their R&D.)

  3. The article is not entirely correct but it is still a decent attempt. The whole subject of diesel is not related to brexit as such and shouldn't be attributed to it therefore.

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