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Brexit: Half of the car's investment in the industry as "red alert"

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Investments in the British automotive sector were almost halved last year, and production went down because fear of Brexit puts the company on "red alert", the trade body of the industry said.

Internal investment fell 46.5% to 588.6 million pounds last year with 1.1 billion pounds in 2017, according to the Company of Manufacturers and Motor Dealers (SMMT).

Production fell by 9.1% to 1.52 million vehicles, with production for the UK and exports by 16.3% and 7.3% respectively.

The uncertainty of Brexit "has done enormous damage," said SMMT chief Mike Hawes.

However, the impact on investment, jobs and jobs so far has been "nothing compared to the permanent devastation caused by the interruption of our trade ties overnight, not only with the EU, but with many other global markets we are currently free to sell", added is. .

"With less than 60 days before we leave the EU and the risk of collision without ever becoming more realistic, UK Automotive is in alarm," he said.

Politicians must do all they can to avoid a non-agreement, he said.

Its sordid forecast follows strong alerts from other business groups on Wednesday. Carolyn Fairbairn, the CBI general manager, said on Tuesday it would re-negotiate a withdrawal agreement from the UK "which feels like a right-throwing dice".

Stephen Kelly, executive director of the Northern Ireland Production Division, told the BBC that businesses are in despair and confusion about what is happening.

Mr. Hawes said that despite voting in the Lower House on Tuesday night, "nothing has changed".

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Analysis: Simon Jack, BBC's business editor

Investing in the automotive industry comes in uneven quarters because old models are retired and new ones are introduced over time. But even allowing it, plunging new investments discovered this morning is harsh.

In 2015, car makers invested 2.5 billion pounds in the UK. Since then it fell every year, and in 2018 it was only 589 million pounds.

The uncertainty of Brexit was not the only issue with which the sector faced – confusion about diesel policy, the decline in sales in China and stoppages in production due to new regulations also played a role.

But SMMT was clear that Brexit presented what he calls "the most significant threat to the competitiveness of the British automotive sector in the generation."

Production companies relying on finely-tuned Pan-European supply chains sounded harshly about the dangers of Brexit without a job. These figures will not do anything to change that.

"Significant Threat"

Sales of 16.3% of cars destined for UK sales were fueled by uncertainty about the future of diesel engines, regulatory changes and consumer and business downturns, according to SMMT.

However, exports to the EU dropped by 9.6%, which is less than the fall in domestic production.

Overall, the EU still accounts for a large majority of exports to the UK, 52.6% or 650.628 cars. Although export to the United States increased by 5.3%, mainly due to demand for premium models, Mr. Hawes warned that this improvement could change if duties were imposed on tax changes after Brexit.

Other key markets outside the EU would also have been hurt, he said. Last year's exports to Japan increased by 26% and South Korea by 23%, but pointed out that both countries are subject to EU preferential trade agreements.

Export to China dropped by 24.5%. The Jaguar Land Rover (JLR), the UK's largest car maker, has already highlighted the pain of slowing down sales in China.

JLR shutdown

Earlier this month, JLR confirmed that it would cut 4,500 jobs, blaming Brexit's uncertainty, declining diesel sales, and slowing down Chinese economic activity.

The car manufacturer also announced it would extend its annual shutdown in April for an additional week due to concerns that deliveries could be halted in time if Britain leaves the EU without agreement.

Mr. Hawes pointed out that the drop in output last year came after falling in 2017, following seven years of unprecedented growth when the sector emerged from the recession.

"As a highly integrated sector that has maximized the benefits of the single European market and the customs union, Brexit's no-deal is the most significant threat to the competitiveness of the British automotive sector in the generation," he said.

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