Photo: General Motors
Brexit has caused a stir in the automotive industry, as make wondered if automakers will keep their factories in the United Kingdom if the country votes to leave the European Union.
While potentially higher taxes on cars sold in the EU could harm automakers and consumers alike, companies have also invested billions in their facilities in Great Britain, which makes the decision to close them extremely challenging.
You do not have to be an automotive analyst to see that automakers like Honda, Nissan, Toyota, General Motors, and others have made significant investments in their facilities, and risk facing a choice between higher taxes on cars sold in the EU and abandoning a plant that has seen millions of pounds in the form of investment.
According to a report from LMC Automotive, the automaker that is most likely to close at least one of its factories in the United Kingdom after Brexit is completed was General Motors.
The automaker has two facilities in the country, Automotive News as notes, but the Ellesmere Port facility is under a “high risk” if the UK does not secure a mutually favorable trade deal with the European Union. Vauxhall representatives have stated that it is “business as usual” for them until the UK signs an accord with the European Union on their future connection.
According to Garel Rhys, emeritus professor of motor industry economics at the UK’s Cardiff Business School, only 25% of the parts used by the Ellesmere Port factory are sourced from the United Kingdom. This is not a problem today, when the UK is an EU member, but could become an issue after the country leaves the European Union.
Analysts believe that the plant closure would likely happen around 2021, when Opel and Vauxhall would launch the next generation of the Astra compact car. The same model is also built in the Gliwice facility, located in Poland.
As explained above, the Ellesmere Port facility is at risk if a trade deal is not reached with the EU because it has the lowest parts localization out of any volume maker that operated in the country.
You do not have to be an automotive analyst to see that automakers like Honda, Nissan, Toyota, General Motors, and others have made significant investments in their facilities, and risk facing a choice between higher taxes on cars sold in the EU and abandoning a plant that has seen millions of pounds in the form of investment.
According to a report from LMC Automotive, the automaker that is most likely to close at least one of its factories in the United Kingdom after Brexit is completed was General Motors.
The automaker has two facilities in the country, Automotive News as notes, but the Ellesmere Port facility is under a “high risk” if the UK does not secure a mutually favorable trade deal with the European Union. Vauxhall representatives have stated that it is “business as usual” for them until the UK signs an accord with the European Union on their future connection.
According to Garel Rhys, emeritus professor of motor industry economics at the UK’s Cardiff Business School, only 25% of the parts used by the Ellesmere Port factory are sourced from the United Kingdom. This is not a problem today, when the UK is an EU member, but could become an issue after the country leaves the European Union.
Analysts believe that the plant closure would likely happen around 2021, when Opel and Vauxhall would launch the next generation of the Astra compact car. The same model is also built in the Gliwice facility, located in Poland.
As explained above, the Ellesmere Port facility is at risk if a trade deal is not reached with the EU because it has the lowest parts localization out of any volume maker that operated in the country.
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