EU referendum, brexit and the aftermath

https://mobile.twitter.com/davidfickling/status/1097622999610548224

Interesting. Did not realise how few they sold in Europe.

Interesting. I can see the importance of access to the FTA but I still think car plants in this country are fucked. I grew up in the Midlands, my Dad worked in the automotive industry, it's been happening for years and the drop in demand for diesels and ultra low emission requirements are another two nails in the coffin. JLR is genuinely struggling, they warned a long time ago that Brexit would be bad for their business but dieselgate (when their range is mostly diesel), falling Chinese demand and the high cost of doing business in the UK seems to have done the damage, not Brexit.

Honda have said that they want to invest in a region that is a big marketplace for them: they sell more vehicles in the US, Japan and China so that means outside of Europe, not just outside of the UK. They've also announced they're going to stop making the Civic in Turkey, which presumably has nothing to do with Brexit.

Vauxhall pretty much only still make the Astra in Ellesmere Port so they can say it's made in Britain.

If you've ever driven a recent Astra you can understand why they need that selling point...

I read somewhere that some of the parts for the Turkish Civics are made in Swindon and Belgium but I cannot verify this .

How many cars does the UK export?

"1.7 million cars built in the UK in 2016, an increase of 8.5% and the highest output for 17 years. Exports at record levels for second consecutive year as more than 1.35 million cars shipped worldwide. More than one in two cars exported to Europe, our single biggest trading partner, with demand up 7.5%." 26 Jan 2017, https://www.smmt.co.uk/2017/01/17-year-high-british-car-manufacturing-global-demand-hits-record-levels/

Note: "Growth driven by multi billion pound investments in previous years – not post Brexit bounce."

Not if you have any understanding of the global challenges facing the automotive industry.

Honda has an engine plant in Swindon so the engines could well be assembled there.

Not sure how this announcement affects the engine plant, are they shutting everything or just the Civic production line?

All production, just keeping their HQ .

Good roundup here of who makes what where:
https://uk.reuters.com/article/us-britain-autos-factbox/factbox-uk-car-production-who-builds-what-and-where-idUKKCN1Q71M0

Apparently the default WTO car export tariff is 38%. In most circumstances, if a country wants to agree a lower rate with another WTO member the same rate has to be offered to all WTO members and approved by all members. There are some exceptions though, of which I have no knowledge.

The WTO members meet for ratification sessions at president level every two years and at minister level every six months to a year. I can't imagine that the prospect of a hard Brexit is making any car manufacturers in the UK to jump for joy right now.

Slightly ropey chart, would be nice to see longer x axis.

If you've ever driven a recent Astra

I have. Awful car. Makes me understand why people who drive them tend to be so impatient and angry.

And a longer y axis - while the fall definitely isn't negligible, it's not quite as steep as that chart makes it out to be either!

It is completely mad to suggest the withdrawal of Honda and several other companies is nothing to do with brexit.

I don't know about the other companies, but Brexit was probably one of many factors that made them up sticks, and 'brexit played a teeny tiny role in this decision, but honestly guys, it's totally dwarfed by X, Y and Z, and those horses bolted years ago' is the boring and difficult to parse truth that nobody really wants to hear.

Is the death of cars a silver lining to brexit?

I just created a list from memory of companies that have either announced closures or announced that they are relocating at least some staff out of the UK .

Ernst and Young have said that 77 of the 222 companies that they monitor are moving some or all of their operations to the EU at the moment. A third of EU based companies have cut investment in the UK since 2016.

Of course, this is entirely normal and nothing to do with Brexit.

HSBC
Llloyds of London
JP Morgan
Barclays
UBS
Moneygram
European Medicines Agency
European Banking Authority
Unilever
FlyBMI (closure)
Honda
Nissan
Panasonic
Muji
Nomura Bank
Daiwa Bank
Deutsche Bank
Diageo
Goldman Sachs
Microsoft
Bank of America
Sony

https://youtu.be/ncHAwux70u8

I wondered that. If it accelerates a shift to electric, could be that rare thing - an upside...

Not that we'll be able to afford them when the only industry left is cabbage picking, but still

Building a car factory (well any factory) needs an enormous investment. So you won't run away over Brexit.

But if your cars get slapped with a huge WTO tariff after a messy Brexit / your JIT parts imports processes are broken thanks to half assed EU access, your 10 year plan may not include the UK.

Another example on how populist measures leasing to badly thought out deglobalization can backfire massively.

Bye bye jobs, and what will come back in their place?

In short, financial services of the kind where there is very little trickle down of wealth. And not much tax paid.

By and large, the car industry is ahead of the game on electric cars. Its public demand that needs to catch up.

Are you suggesting that having a financial industries is totally worthless to GDP?

This suggests they pay £10's billions in tax.
https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN06193

Whether they should pay more ("yes") is probably a discussion one should have quite apart from the one where we decide to just give up on the industry.

Just cars made here. The people still living in England, I mean the ones that can afford to, will just import the same Audis and Beemers they're used to.

I'm suggesting that deindustrialisation and subsequent focus on financial services in the South East hasn't been very beneficial to the people who live in those deindustrialised areas.

GDP is one thing. GDP distribution is another.