On June 23rd, 2016, the United Kingdom will hold a referendum on whether the country should remain in the European Union. An exit from the EU, referred to as ‘Brexit‘, would have a far reaching impact on the UK’s economy, including healthcare, transport, tourism, and trade.
Opinions and analysis vary wildly on the overall effect of Brexit, with some commentators believing that leaving the European Union would be a positive thing, and others suggesting it would be a disaster.
What about the motor trade? According to an independent survey carried out on members of the Society of Motor Manufacturers and Traders, the motor industry is overwhelmingly in favour of remaining in the European Union.
88% of large businesses within the industry believed that staying in the European Union would benefit the motor trade, with key figures from BMW, Vauxhall, and Toyota speaking out against Brexit. 73% of small to medium businesses agreed, giving an overall figure of 77% in favour of staying.
Just 9% of those surveyed felt that Brexit would have a positive effect on their business, while 14%, in common with many other people in the country, were uncertain of the effects of leaving. Most Society of Motor Manufacturers and Traders members agreed that reforms to the UK’s position in the EU, giving the country more influence in decision making, were desirable, but that remaining would carry far more benefit than leaving.
The general feeling is that the industry benefits from opportunities opened up by membership of the European Union. Trade agreements between member states not only facilitate sales of new and used cars abroad, but allow businesses within the UK to employ skilled workers, research and development specialists, and other vital roles from the wider European community. Imports of parts and raw materials would also be affected.
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This could well cause major manufacturers to pull out of the UK, choosing instead to site factories in countries where manufacture, trade, and movement of goods are cheaper and easier.
In 2015, 77% of the cars manufactured in the UK were destined for export, a total of 1.3 million vehicles, and 57% of those were shipped to other countries within Europe. This represents a significant contribution to the UK’s economy, both in terms of financial gain and employment.
It is likely that Brexit would produce obstacles to trading in Europe, ranging from extra tariffs and restrictions to added paperwork. The added time and money would increase the cost to Europeans of buying a car made in the UK, with the associated effect on trade. As well as British cars travelling to Europe on trade plates, British drivers abroad are likely to see an increase in costs on their insurance policy.
Most members of the motor industry agree that Brexit would leave the UK isolated and vulnerable, with heavy restrictions compared to countries remaining in the union.