KPMG: new car sales growth adjusted down 1/6 after Brexit

Friday 24th June 2016 | 0 Comments

 

Market analysts at KPMG have revised down full year 2016 new car sales predictions by a sixth from 3 million units to 2.5 million following the UK’s decision to leave the EU. The fear is that the automotive industry, of which tyre supply (both OE and aftermarket) are clearly a part will be most seriously and negatively affected by Brexit. John Leech, head of automotive at KPMG UK, certainly suggested as much: “The British public has voted to leave the EU. As recent surveys showed, the automotive industry is anticipated to be one of the sectors most impacted by the vote to Leave the EU.”

Leech suggested action should be taken immediately to mitigate risk: “While it will take years for the UK’s future relationship with the EU and other countries to become clear, there are steps that the Automotive Industry should take now. The fall in Sterling and commodity prices will prompt vehicle production plans, sales incentives, financing arrangements and purchasing plans to be adjusted. Information about employees, procurement and distribution needs to be gathered and reassessed such that quick action can be taken once the anticipated changes to VAT, customs and migration rules are enacted.“

There is even the suggestion that Brexit could affect the UK’s booming car market – itself a trigger for ongoing replacement tyre sales growth: “In recent months we have seen some industry commentators believe that UK new car sales could top 3 million in the coming years. The vote to leave the EU means that this has become highly unlikely and I now forecast that new car sales will fall to 2.5m cars in 2017. I still anticipate that UK car production will grow by double digits in 2016 to 1.7 million cars driven principally by EU exports buoyed by the weak pound.”

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Category: International News, Legislation, UK News