As I am sure everyone is very aware, the United Kingdom has voted to leave the EU in the recent historic referendum. Dubbed Brexit, although I think that sounds like some form of breakfast cereal along with credit crunch, the repercussions of the UK leaving the free market are already being felt across Europe, and indeed the world. Nobody knows for sure what this vote of independence will mean in the long term, but it is safe to say that whilst things settle many companies are sitting uneasy. The automotive industry is very strong within the UK as we buy more cars per household than almost anywhere else. Over the decades it has made sense for manufacturers to invest on these shores, but all of a sudden it might not be to their advantage.
Honda are a huge source of employment within Swindon where large amounts of manufacturing are done. In fact, over the past 30 years the Japanese firm has invested £2.2 Billion in the area. Swindon is also set to be the producer of the all-new Civic hatchback that will be exported globally. The official word from Honda on Brexit is as follows:
“A decision has been taken by the British people and Honda respects that decision.
At this moment, it is not clear what conditions and rules will ultimately replace the UK’s membership of the EU. We will therefore carefully monitor developments.
We continue to prepare for the production launch of the 10th generation Civic from our Swindon plant.
Honda remains committed to its business in Europe.”
It is clear that Europe still means a lot to Honda, especially in terms of sales, but this is by no means an unbreakable bond when it comes to keeping manufacturing in the UK. As stated things will be monitored, but could you blame any business for moving away if these new conditions were unfavourable? Personally I think Honda will remain for a good while yet at least, especially when you consider the level of resources already invested. In addition the government would likely be put under pressure to cut a deal to save jobs.
Mini are another company that Brexit could potentially impact. Their plant in Oxford is their home, but with all of this uncertainty in the air, nobody knows what the future holds. Piers Scott, BMW Group General Manager, Product & Internal Communications, has said:
“BMW Group is committed to the UK, its fourth biggest market and home to two of its brands, and respects the British electorate’s decision to leave the EU. Given the current political uncertainty regarding next steps, all we can say regarding our own activities in Britain is that we continue to operate “business as usual”. Until we receive answers to the many open questions regarding the UK’s future trade relations with the EU and other countries, we cannot speculate about any possible impact Britain’s decision to leave the EU may eventually have on our UK operations.”
Not just Mini but also Rolls Royce, from BMW’s perspective, are key investments within the United Kingdom. All we can do at this point in time is speculate but it would be a tragedy to see these two British icons scale back their involvement in their home nation.
Brexit has its potential pros and cons, but as we have yet to receive any word on what the government plans on producing going forward, all we can do is keep our fingers crossed.