The UK electorate has voted to leave the European union in a decision that is sending shockwaves through financial markets. It was only the third referendum in British history (two of which have related to the UK’s role in Europe).
John Leech, Head of Automotive at KPMG in the UK, has highlighted concerns relating to what would happen to the UK automotive market in the event of Brexit. With SMMT data suggesting that more than nine out of ten automotive market members are in favour of remaining, his views add detail to that consensus perspective. He said:
Potential buyers of higher value used cars appear to be holding back until the outcome of the UK’s referendum on its membership of the European Union is known, according to vehicle data provider, Glass’s. The company is increasingly hearing anecdotal evidence from dealers that cars priced over £15,000 are struggling to sell; it suggests the potential withdrawal of the UK from the EU could be the cause.
One of the less-frequently discussed consequences of the UK leaving the EU after June’s referendum is the effect on used car values, but leading vehicle data provider Glass’s says that there would be “significant uncertainty”, should this be the outcome, but points out that there are virtually no precedents on which to base the likely impact of a Brexit.
OEMs making cars in the UK want to stay in Europe. 77 per cent of SMMT members say remaining in Europe is best for their business, according to 2016 survey by independent pollster ComRes. Indeed, there is strong support for EU membership across the board, with 88 per cent of large SMMT member companies and 73 per cent of SME members in favour of remaining. This is the second time SMMT members have been canvassed on their Brexit views – and the second time the overwhelming majority have stated that staying in Europe is best for their business.
Toby Massy, managing director of BM Catalysts has come out in favour of staying in the EU. His anti-Brexit remarks were prepared the week before Prime Minister David Cameron’s latest “emergency brake” deal with EU leaders and before London Mayor Boris Johnson announced he would head up the leave campaign, but remain the same now.
The morning we went to press we awoke to the news that David Cameron has almost negotiated an “emergency brake” deal. In other words, the British Prime Minister is working to control the number of migrants entering the country and the amount of benefits the state should have to pay them. Early indications suggest that Cameron will be able to pull the “emergency brake” for up to four years if the UK can prove Britain’s social and welfare system is under “excessive strain” from immigration. However, all this obscures the wider political debate that is going on within British politics and the conservative party itself. And it belies the fact that parties of all colours are positioning themselves politically ahead of the UK referendum on whether or not to remain a member of the European Union.
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