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.”
Reflecting on the Brexit news, prompts us to think about the part of the tyre trade the does business the most regularly on the continent – the wholesale sector. But first, let’s take a look at the car trade by way of a proxy. Following the Brexit nes, he National Franchised Dealers Association, which represents franchised car and commercial vehicle dealers in the UK, considered the impact on trading, with Sue Robinson, director of the NFDA saying:
Daniel Kirkpatrick, Team Manager for Automotive at JAM Recruitment commented on how the Brexit vote could impact human resources in the automotive sector, suggesting Brexit will leave Britain under-skilled.
Leading tyre manufacturers have begun offering their responses to the UK electorate’s decision to leave the EU. Describing the trajectory of the Brexit vote as “very worrying”, Continental AG CEO Dr Elmer Degenhart commented: “Taking the pan-European context into account the vote is very worrying. ‘Everyone on his own’ does not fit the idea behind the formation of the EU and cannot be the answer to the challenges of the global competition with America and Asia.”
However, Degenhart does not expect big problems for Continental itself: “The direct economic impact on Continental is expected to be limited because currently we generate less than 3 per cent of our sales in the UK and expect to be successful in this market also in the future.”
This UK Prime Minister David Cameron announced that he would step down by October, following yesterday’s referendum result supporting a British exit – or Brexit – from the European Union.
The markets responded with historically high level of volatility – especially in terms of sterling’s value against the dollar and at the FTSE 100. This in turn led to calming statements from Bank of England governor Mark Carney, who reassured investors of Britain’s financial capabilities and contingencies.
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: