How has Brexit Impact the Automotive Industry in the UK?

Perhaps the only positive of the coronavirus pandemic is that it firmly distracted us from our previous sole talking point in Brexit.
Luckily, now the dust has largely settled on the worst of a global crisis, we can move back to discussing our domestic one, and debating whether it really will end up being a good call to have left the European Union, or indeed whether the fish in the channel are truly happier now for being British.

automotive industry
Image from pxfuel

Of course, a globally connected industry like automotive was never going to escape the clutches of changing trade laws and uncertain manufacturing bases that Brexit brought with it, and as we get used to life in an independent Britain, there a few areas of focus to consider.

A drop in exports

With the UK’s access to the European single market currently uncertain, there is significant threat to the domestic car manufacturing base, with many major brands threatening a move off our shores to more certain ground.

Currently, the UK exports over 1.2m cars a year, with over half heading into the EU. According to PA Consulting, continued uncertainly in the wake of Brexit could lead to a 5-10% drop in demand and sales. As per research, plants run by Toyota and Honda face the biggest risk of closure, and as the UK peddles out plans to be a green automotive superpower – which will require huge investment and major manufacturer presence for the creation of all-important gigafactories – current export predictions do not paint a pretty picture.

Some edits to insurance

Largely, domestic insurance policies will not be affected by Brexit. There are a few edits to policies driving on the continent, however.
One of the notable changes comes in the form of additional document requirements, with certain licence holders now required to carry an International Driving Permit (IDP) in some EU countries and Norway. Visitors to the Republic of Ireland no longer need to carry a green card, but they will be required across the continent for drivers towing a trailer or caravan.

Additionally, it’s been recommended to start carrying the V5C log book abroad, as well as other insurance documents to help in the instance of problems occurring while driving abroad. As for additional policies like GAP insurance, Brexit is unlikely to cause much trouble.

The fuel ‘crisis’

Is what’s happening right now really a crisis? Is it the fault of Brexit, or is it a pandemic legacy issue?

According to transport secretary Grant Shapps, Brexit has been a “factor” behind the crisis, as the UK’s driver-starved HGV industry is failing to live up to now panic-inflated supply requirements. While it’s hoped equilibrium will be restored in the next week or so, the rather striking images of road blocking queues for local petrol stations has not been a good look for Brexit, regardless of its level of influence on the situation.

Much of Brexit’s impact on the UK car industry is still ‘TBC’, but what’s clear is that initial market uncertainty has unsurprisingly done the auto world no favours. With a pandemic-driven global microchip shortage to worry about and an inflated used car market not presently meeting demand, industry leaders will hope Brexit matters have limited impact in the coming months.

Jasper has been an enthusiast of the automotive and IT industries since the age of 16. He independently writes on the auto industry's recent happenings.