The UK automotive industry would be one of five UK industries most damaged by a no-deal Brexit, according to Andy Baldwin, a managing partner at EY in charge of Europe, the Middle East, India and Africa.
In an interview with Yahoo Finance at the Davos economic forum, Baldwin said that financial services, life sciences, agriculture, automotive and tourism are the five most vulnerable industries should there be no deal to Brexit.
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“Financial services are actually very well prepared for a hard Brexit. A lot of work has taken place over the last two years,” he said. “I think the other sectors are probably a little bit further behind because they were hoping there would be some form of compromise agreement reached.”
Baldwin said that several European governments had started to engage plans to deal with a hard Brexit, and this was being reciprocated by actions of major manufacturers.
“What you have seen with the automotive sector is that a number of them have announced temporary shutdowns at what they expect to be the peak disruption period. What we are also starting to see is looking at their components and supply chains (when you look at these operations they all rely on ‘just-in-time’) so they have got to create more delays into the production process. We are now seeing auto manufacturers looking at their supply chains, do they need to move suppliers, do they need to move supply chains?”
In other reports, Honda, Mini and Rolls-Royce have planned to shut down their factories in the days after the Brexit deadline on 29 March in order to handle potential disruptions.
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By GlobalDataEarlier this month, German car manufacturers warned of the negative effects of Brexit on their operations in the UK.
In 2016, Britain was the largest single export market for German manufacturers, who sold 800,000 new cars there. German auto industry association VDA said: “The consequences of a ‘no deal’ would be fatal. Without an orderly and practical solution for business, jobs in the car industry, particularly on the British side, are on the line.”
BMW, which builds 60% of its Mini vehicles at a plant in Oxford, extensively uses components imported from BMW’s German plants. Around 80% of vehicles assembled in the country are exported, mostly to the European Union.
