Photo: Volkswagen
We were expecting Britain to vote itself out of the European Union. Hopefully, it's not the all-out destruction of the organization which many have predicted. However, the reaction from international stock markets is positively shocking.
Billions upon billions of value were wiped today from the values of many companies. The losses faced by investors are similar across the board, though some companies have been struck harder than others.
What's irritating is that the stocks of these companies are already trading at record low levels for the year, since investors took no risks. Just in case another 'defeat device' was found, BMW or Daimler was also discounted.
Depending on where you look (after hours trading included or not), Volkswagen is down between 5% and 9%, give or take a bit. BMW is down about the same, Daimler AG went under by 8.2% and Nissan managed -8.1%.
We would tell you to sell your car and buy some stocks, but we'd be wrong. You see, investors are smart to be so jittery. Britain is the first or second biggest European car market for most companies, right up there with Germany.
To ensure stable trade, Honda, Nissan or any other company that assembles cars in Britain will try to play by the rules. But sales and/or profits will be hit.
Interestingly, the numbers are suggesting trade with Japan will be even harder hit, though it's probably not because driving is done on the left side of the road in both countries.
And this could just be the tip of the iceberg. The last decade of UK industry has been defined by growth. However, things are likely to change after Brexit. It makes no sense for an already struggling Honda to keep its factory in Swindon, especially as most of the production goes to Europe or, starting in 2017, the US.
Events like these do not happen every day or even every decade. The EU's main priority now will be to discourage other countries from following the British example.
What's irritating is that the stocks of these companies are already trading at record low levels for the year, since investors took no risks. Just in case another 'defeat device' was found, BMW or Daimler was also discounted.
Depending on where you look (after hours trading included or not), Volkswagen is down between 5% and 9%, give or take a bit. BMW is down about the same, Daimler AG went under by 8.2% and Nissan managed -8.1%.
We would tell you to sell your car and buy some stocks, but we'd be wrong. You see, investors are smart to be so jittery. Britain is the first or second biggest European car market for most companies, right up there with Germany.
To ensure stable trade, Honda, Nissan or any other company that assembles cars in Britain will try to play by the rules. But sales and/or profits will be hit.
Interestingly, the numbers are suggesting trade with Japan will be even harder hit, though it's probably not because driving is done on the left side of the road in both countries.
And this could just be the tip of the iceberg. The last decade of UK industry has been defined by growth. However, things are likely to change after Brexit. It makes no sense for an already struggling Honda to keep its factory in Swindon, especially as most of the production goes to Europe or, starting in 2017, the US.
Events like these do not happen every day or even every decade. The EU's main priority now will be to discourage other countries from following the British example.
Google News