BRI­TISH FIRMS FACE UP TO EURO CHANGE

In­dus­try bosses are up­beat de­spite coun­try’s fu­ture chal­lenges

Motor Sport News - - Front Page - By Rob Lad­brook

Lead­ing lights in Bri­tish mo­tor­sport have is­sued a ral­ly­ing call, in­sist­ing the in­dus­try is pre­pared to face any po­ten­tial eco­nomic trou­ble brought about by the coun­try’s exit from the Euro­pean Union.

The United King­dom last week voted to leave the Euro­pean Union by just a 1.9 per cent mar­gin af­ter an his­toric ref­er­en­dum. The ver­dict has di­vided the na­tion, and led to un­set­tled fi­nan­cial fore­casts for the coun­try’s econ­omy go­ing for­ward, as well as po­lit­i­cal dis­rup­tion in the wake of Prime Min­is­ter David Cameron’s de­ci­sion to re­sign.

The pound dropped sharply when the ver­dict was an­nounced last Fri­day morn­ing, plung­ing to its low­est level for 31 years against the US dol­lar and share prices in both bank­ing and hous­ing de­vel­op­ers suf­fered big hits. Mo­tor­sport is one of the UK’S lead­ing ex­ports, with an es­ti­mated 4,300 com­pa­nies pro­vid­ing 41,000 jobs and boast­ing an an­nual turnover of £9 bil­lion.

De­spite the short-term tur­moil, key mo­tor­sport in­dus­try fig­ures have called for calm and in­sist trad­ing can con­tinue as usual.

Bri­tain has yet to trig­ger the Ar­ti­cle 50 agree­ment, which for­mally be­gins the two-year le­gal with­drawal process from the EU, mean­ing the UK will re­main a part of the EU and func­tion un­der its cur­rent laws for at least the next 24 months.

Chris Aylett, head of the Mo­tor­sport In­dus­try As­so­ci­a­tion which net­works en­gi­neer­ing com­pa­nies around the world, told Mo­tor­sport News: “It’s very easy to find the neg­a­tives, but we’re on the edge of change and with every change there is an op­por­tu­nity, as well as dif­fi­culty. This is now about rolling up our sleeves and finding the best di­rec­tion to go in. It’s hard work, but we start from a very good base. We are com­pa­nies that have proved our­selves to be world class. That doesn’t change at all.”

Aylett added that leav­ing the EU doesn’t mean trade will be im­me­di­ately re­stricted, point­ing out other mar­kets in which ex­ports are strong.

“Bri­tain is a £10bn busi­ness in mo­tor­sport and we ex­port glob­ally, not just to the EU,” added Aylett. “Europe is a sig­nif­i­cant mar­ket, but it is not the only mar­ket. One of the se­cu­ri­ties that took us through the 2008-’09 pe­riod rel­a­tively com­fort­ably is we have an in­ter­na­tional or­der book from South Africa, Aus­tralia, the Far East and so on.

“As long as we can say our in­dus­try con­tin­ues to make prod­ucts or ser­vices to a win­ning for­mula then peo­ple will buy them. There may be a pre­mium in the fu­ture, Europe may de­cide to put taxes on Bri­tish mo­tor­sport prod­ucts, but then our win­ning prod­ucts will sim­ply get more ex­pen­sive for the Euro­peans. They could buy them cheaper else­where, but we know that doesn’t win. I would sug­gest peo­ple will want to con­tinue buy­ing Bri­tish prod­ucts.

“We could look to in­crease trade in Amer­ica for ex­am­ple, the largest sin­gle mar­ket ge­o­graph­i­cally. No NASCAR race takes place with­out Bri­tish-made parts in the cars, same with Indycar. Amer­ica could be an op­por­tu­nity, with the lower pound value we are very com­pet­i­tive price-wise, which helps ex­ports. Hope­fully along­side that our friends in Europe will want to con­tinue a con­fi­dent re­la­tion­ship with us.”

Brands at the fore

Should Bri­tain leave the EU en­tirely, it will be nec­es­sary for the coun­try to ne­go­ti­ate fresh trade deals with EU mem­ber coun­tries and be­yond in or­der to sus­tain the econ­omy.

The changes to im­port and ex­port rules will have im­pli­ca­tions for all busi­nesses, with man­u­fac­tur­ers likely to be the most im­pacted. Global au­to­mo­tive giants such as Nis­san, Toy­ota and Honda all have man­u­fac­tur­ing plants in the UK, us­ing it as a gate­way to trad­ing with Europe.

Mo­tor­sport man­u­fac­tur­ers are split on whether the move away from the EU sin­gle mar­ket is a wise one. M-sport man­u­fac­tures Ford rally cars of all lev­els from its base in Cock­er­mouth. Com­pany head Mal­colm Wil­son said: “Given that 80 and 90 per cent of our busi­ness is ex­port, you can un­der­stand that this de­ci­sion is far from ideal.

“OK, we’ve seen move­ment in the ex­change rate which would be favourable to the mar­ket [with the Pound drop­ping], but what hap­pens when I come to buy my next batch of trans­mis­sions or when­ever we try to buy any­thing from abroad?

“One of the big­gest prob­lems is in­de­ci­sion. Who knows what trade re­stric­tions other coun­tries might place on dealing with the UK now? This is a real worry for us, no­body can say they’re not go­ing to place a 20 per cent tax on any­thing brought from Bri­tain.

“Mo­tor­sport folk, his­tory has shown, are re­silient and, of course, we’ll get through this, but last week has thrown a very big span­ner in the works.”

In con­trast Lawrence Tom­lin­son, chair­man of the LNT Group which owns Leeds mar­que Ginetta, in­sists the de­ci­sion is good for busi­ness. Tom­lin­son was an ac­tive cam­paigner for Brexit.

Tom­lin­son said: “I have many friends in Europe who I will con­tinue to trade with, and it is im­por­tant that we stay friends with the peo­ple in the EU, but we must not end up with a poor deal. We must re­main firm be­cause re­mem­ber, they need us just as much, if not more, than we need them.

“Busi­ness is held back by Brus­sels and we could, as a na­tion, func­tion bet­ter and more ef­fi­ciently out­side of the EU. We are con­strained cur­rently. We want to com­pete on a global scale, growth is com­ing from the US, from China, from In­dia, and we can’t grow into these mar­kets be­cause the EU leg­is­la­tion con­strains us. I don’t think [tax] tariffs will be put up be­cause other na­tions want ac­cess to our mar­ket.”

Or­gan­is­ers speak

The prospect of an in­de­pen­dent UK could also pro­vide chal­lenges for race or­gan­is­ers, es­pe­cially those op­er­at­ing within Europe as well as do­mes­ti­cally.

The Stephane Ra­tel Or­gan­i­sa­tion is based in Lon­don and runs both Bri­tish GT and the pan-euro­pean Blanc­pain GT classes.

Com­pany head and founder Stephane Ra­tel told MN: “For the mo­ment we have to stay pos­i­tive about this as I don’t think it’s fan­tas­tic for busi­ness. But the key thing is no­body knows what will hap­pen now – it is far too early. Some are doom and gloom, but we do not know this is the case.

“Things now de­pend on what deal the UK can get and how far ‘out’ it be­comes. If it will re­main in the EU in some way, like an as­so­ciate in a sim­i­lar way as Nor­way or Switzer­land then I don’t see much chang­ing. But if it with­draws com­pletely it could be very dif­fi­cult to run things in Europe due to the tax sit­u­a­tions.

“I don’t think mo­tor­sport is the most ex­posed thing. We’ve tra­di­tion­ally not run events out­side of the EU as it makes things dif­fi­cult with cus­toms, im­ports, visas and doc­u­men­ta­tion. I don’t fore­see the UK with­draw­ing that heav­ily to make that a big is­sue.

“The wor­ry­ing thing is if the with­drawal brings a re­ces­sion, then it will af­fect rac­ing no doubt. Last time we ended up with 10 cars in Bri­tish GT [2008] and it hurt. But I feel Bri­tish GT is now bet­ter equipped to deal with this.”

Bri­tish GP safe

The Bri­tish Rac­ing Driv­ers’ Club has de­nied that Bri­tain leav­ing the EU would have an im­pact on the run­ning of the Bri­tish Grand Prix, or the sale of Sil­ver­stone to Jaguar Land Rover.

The BRDC is still in talks with JLR over the pur­chase of the track lease. BRDC chair­man John Grant said: “There is a risk that im­pe­tus to make new in­vest­ment will be slowed. But we’re go­ing ahead with ne­go­ti­a­tions and we’re keen to get a deal, so long as it is ben­e­fi­cial to the club.

“I don’t think the Brexit vote will have any im­pact on the Bri­tish GP. It’s as safe as any GP can be.”

Grant also said he didn’t fore­see trou­ble in the gen­eral op­er­a­tion of Sil­ver­stone: “One of the things we are try­ing to do is at­tract more vis­i­tors from the con­ti­nent, so if the ster­ling re­mains weaker we could see a ben­e­fit. But the big­ger con­cern is that, if we go into an eco­nomic down­turn, peo­ple will be less well-off and spend less.” Ad­di­tional re­port­ing by David Evans, Scott Mitchell and Kevin Turner.

Aylett: Bri­tain is world class

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