April 19, 2019

U.K. Auto Industry Already Feeling the Brexit Pinch

Demand from China fell by almost a quarter, the figures showed, while demand from the European Union sank almost 10 percent as a global slowdown started to bite.

Automakers like Jaguar Land Rover and BMW have already said that they would briefly pause production after Britain’s scheduled leaving date at the end of March, to assess and cope with any disruptions that come with life outside the European Union.

The chief executive of the luxury carmaker Bentley, Adrian Hallmark, has called Brexit a “killer” for his turnaround plans.

And London Electric Vehicle Company, which makes black cabs and is owned by Geely of China, said on Thursday that it would cut 70 position among its agency staff in response to the uncertainty.

Manufacturers in Britain have taken advantage of freedom of movement among European Union members to create just-in-time manufacturing processes that allow components to be delivered minutes before they are needed. That has allowed companies to use expertise and plants in different locations and reduced the need for storage.

But many manufacturers are now choosing to stockpile parts as the Brexit deadline draws nearer without confirmation that they will have the same trade advantages as before.

An exercise in traffic management this month near the port of Dover, in southern England, prompted ridicule and did little to reassure businesses that they would be able to continue bringing goods into Britain without major delays.

The damage already done to the car sector, Mr. Hawes said, would be “nothing compared with the permanent devastation caused by severing our frictionless trade links overnight, not just with the E.U. but with the many other global markets with which we currently trade freely.”

Article source: https://www.nytimes.com/2019/01/31/business/uk-brexit-auto-industry.html?partner=rss&emc=rss

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