The continued uncertainty surrounding Brexit has kept the United Kingdom’s automotive industry in a state of perpetual ambiguity amid a global slowdown. Although a hard Brexit is not the most likely outcome for the UK at this point, UK automotive producers are dealing with significant uncertainty around the UK’s exit from the EU—and that only compounds other challenges they are facing.
Currently, the UK automotive industry is the twelfth largest in the world and the fourth largest in Europe. It is one of the most important contributors to the UK economy. In 2017, the UK automotive industry had a turnover of £82 billion, added £20.2 billion in value to the UK economy, and contributed to £44 billion worth of exported products, approximately 11.1% of the UK’s export of goods and 7.0% of its total exports of goods and services.
But the prospect of Brexit is throwing the industry’s future into question.
Many areas of a Brexit deal, such as tariffs and non-tariff barriers, have yet to be finalized and are bringing uncertainty to UK producers’ supply chains and investment decisions. All of this is in the context of depressed domestic demand and a European automotive sector that is already struggling with falling sales and production.
Now more than ever, UK-based automotive industry players need to understand the various scenarios associated with Brexit in order to navigate uncertainty and ultimately embark on an optimizing trajectory. To prepare for the country’s evolving business climate, UK-based automotive and transportation firms need to focus their business models on the areas of Brexit that will have the largest impacts on their supply chains and investment decisions.
To build the right plan and mitigate risk amid the uncertainty of a hard Brexit, contact a DuckerFrontier automotive expert today.
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