Automakers to reconsider their investments after Brexit

#hashtags: #Britain #European Union #Brexit #June 23

As Britain has decided to leave the European Union, some of the automakers with factories there said they will reassess their investment strategy.

Following the Brexit vote on June 23, the automakers with operations in the UK have already started to readjust their strategy, as most of them have been relying on heavy exports to the European Union, a Community that means no extra taxes and free movement of people and goods within its borders, which are great benefits for their profitability. And the biggest concerns come from the Asian companies, such as Toyota and Nissan, which have warned that an exit will seriously hit the UK’s automotive industry.

“We don’t have any choice but to be more cautious with our investment decisions, including moves like whether to produce a new or significantly redesigned vehicle model in the UK,” told to Reuters an executive of a global automaker with manufacturing capacity in Britain, speaking on condition of anonymity.

Toyota already said it would probably have to cut costs or make its cars more expensive, thus affecting its sales. The world’s largest automaker produced around 190,000 cars in Britain last year, with 75 percent directed to EU markets and with only 10 percent sold within Britain.

As for Nissan, it was the biggest producer on the local auto industry in the UK until last year, when it was overpassed by Jaguar Land Rover. In 2015, it built more than 475,000 vehicles, 80 percent of which are exported. Mini, Rolls-Royce, Bentley and Honda also build cars in the UK.

Despite the vote, Jaguar Land Rover said it would keep its investment strategy. “Europe is a key strategic market for our business … we remain absolutely committed to our customers in the EU,” a spokeswoman said in the statement.

The British premium sports car maker Aston Martin cautioned that it would have to be more efficient in terms of productivity from now on, also saying the best outcome for the industry would be a tariff-free agreement between UK and EU.