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Brexit is tipping the UK's automobile trade over the sting - Pak Auto Services

Brexit is tipping the UK’s automobile trade over the sting

Brexit is tipping the UK’s automobile trade over the sting


Britain’s automobile trade has confronted a barrage of unhealthy information in 2019. Honda is the most recent casualty, asserting it is going to shut its Swindon automobile plant, which employs 3,500 folks, in 2021. It follows discover from Nissan that it’s withdrawing funding from its Sunderland plant and the announcement of job cuts by Jaguar Land Rover and Ford.

There are many causes for this retrenchment. Globally, there was a stall in automobile gross sales mixed with a glut in manufacturing. Then there’s the flip in opposition to diesel – as soon as seen as a climate-friendly various to petrol. The VW emissions scandal has seen gross sales of diesel vehicles plummet.

So there are clearly greater, longer-term developments at play than Brexit. However, for the UK automobile trade particularly, there aren’t any positives in Britain leaving the EU. What’s extra, the federal government’s dealing with of Brexit is making it straightforward for international automobile producers to resolve to depart the UK.

Honda’s Swindon plant.
Ben Birchall/PA Wire/PA Pictures

How did we get right here?

Japanese vehicles first got here to Britain within the Nineteen Seventies when demand began to surge. With the home automobile trade unable to extend manufacturing and meet this demand, Datsuns (now owned by Nissan) grew to become widespread – not least due to their superior construct high quality.

Japanese automobile makers went on to determine a place available in the market within the UK and throughout Europe and opened purpose-built crops within the UK, which grew to become a few of the best on the planet. When Margaret Thatcher was prime minister within the Eighties she promoted Britain as a gateway to Europe. Honda arrange store in Swindon and Nissan in Sunderland to keep away from the ten% tariff on automobile imports from outdoors the one market.

Honda’s announcement that it’s closing its extremely environment friendly Swindon plant is an interesting, albeit unhappy, instance of how firms and politicians try and rationalise their choice making. Honda has come out and mentioned that Brexit was not the reason for the choice to shut the plant in 2022. This has been jumped on by Brexiters trying to both justify their place on leaving the EU or distance themselves from the continued negotiations going down over the phrases of Britain’s exit. Nevertheless it’s extremely arduous to not see this choice, at the moment, as a consequence of Brexit.

With Theresa Might refusing to rule out a no-deal Brexit, it’s extremely tough to not see it as a significant factor pushing Honda to this conclusion. Honda is intent on growing its electrical automobile vary and is at the moment confronted with the choice of the place to do it. Why not achieve this at its current manufacturing facility? Swindon relies on the M4 hall, which incorporates the cities of Studying and Bracknell, an space usually described as Briton’s Silicon Valley – so the know-how infrastructure would undoubtedly be accessible.

However a UK outdoors of the EU is just not a beautiful possibility for future funding, particularly as Japan now has its personal commerce cope with the EU, which incorporates the phasing out of tariffs on vehicles over the subsequent eight years. It is a profit that won’t embrace the UK if there’s a tough Brexit, which continues to be a risk. So this uncertainty over the Brexit negotiations makes Honda’s choice completely logical.

Learn extra:
UK’s post-Brexit commerce with Japan in jeopardy whereas uncertainty persists

Additionally it is why Japan’s politicians have pressed for a delicate Brexit ever because the referendum end result. This has been more and more vocal because the Brexit date approaches. Shinzo Abe, the Japanese prime minister, has advised Theresa Might that the “entire world” needs to keep away from a no-deal Brexit in January.

In addition to Honda and Nissan, Toyota is the third massive Japanese automobile maker with UK operations. It has not made any Brexit-related bulletins but and this might be linked to the truth that it has focused on hybrid know-how since launching the Prius in 2000. This implies it has been extra immune from shifts in environmental pondering and has simply launched manufacturing of the brand new Corolla at its Burnaston plant in Derbyshire. Toyota has mentioned that selections usually are not being made past the subsequent 5 to 6 years.

So regardless of makes an attempt to downplay Brexit as the rationale for the break up of motor manufacturing within the UK, there’s ample proof that Brexit – and the uncertainty that canine the UK’s future relations with Europe – is the final straw. Automobile makers internationally face myriad challenges to remain worthwhile; they don’t want Brexit so as to add to their troubles.


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December 2022