Brexit Casts Gloom Over 2019 Geneva Motor Show
The 2019 Geneva Motor Show is an exciting time for everything automobile-related, but as stakeholders prepare their wares for display, a gloomy thought pervades in the minds of both car makers and buyers alike–when the United Kingdom leaves the EU this March 20, unless a deal is reached, parts may become harder to source and vehicles could get pricier to produce, resulting in more expensive cars for the consumer.
As the day for Brexit nears, far greater consequences have come to light, some of which will progressively affect many industrial sectors, among them automotive. Unfortunately, the effects will not only affect UK, but other global markets as well.
Analysts predict that the UK breaking away from EU could lead to a massive loss of between 2 to 3 million units in sales over the course of two years. Possible tariffs of up to 10 percent on vehicles shuttling to and from Britain and EU will have a ripple effect all across the globe.
As Brexit has been years in the making, UK car manufacturers already have their plan in place, accounting for every possible outcome. Aston Martin in particular, plans to spend up to GBP30 million (USD40 million) for a problematic Brexit in order to fund the stocking up on car parts and possibly transporting them by plane instead of by sea.
American company Ford, which sources almost 1.3 engines from the UK, expects to rack up USD1 billion in losses if no deal is reached between the UK and EU.
But the biggest blow yet could come from Japan’s Honda, after it announced the closing of its British factory last February.
The uncertainty leaves automakers clawing for solutions, from investing in bulkier vehicle component orders to recertifying certain models.
When all is said and done however, the automotive industry must tighten its belt and roll with the punches, just as it has many times before. And so the Geneva Show must go on, despite the dark shadow looming over it.