BREXIT? WHO KNOWS… BUT IT WON’T BE SIMPLE
Regardless of your political view, we can all agree that Britain’s withdrawal from the European Union hasn’t exactly been smooth or predictable. And events unfolding in Westminster and Brussels mean that, at the time of writing, nobody really knows what will happen.
Which, for multinational car firms with tight production chains that cross the UK/EU border repeatedly, is a massive dose of wholly unwelcome uncertainty in an already turbulent market. And multinational car firms hate uncertainty.
So here’s how things stand. At 11pm on 29 March, Britain will absolutely, definitely leave the EU. Probably.
When/if Britain leaves, relations between the two will be governed by a withdrawal agreement – if the UK parliament approves it in a vote, which may or may not take place midjanuary. Should that not happen, a new deal may be agreed, or Britain will leave without one. Or delay Brexit. Or stage a second referendum. Crystal clear so far, right? If Britain leaves with a withdrawal agreement, things should continue pretty much as they are until 31 December 2020, by which point a full trade deal will or won’t have been agreed. If Britain leaves without a deal, crossborder relations might be covered by World Trade Organization rules or some other yetto-be-determined system (rock paper scissors, anyone?). And that may or may not cause huge disruption to manufacturing industries – including the car industry – with short-timeline production chains that rely on tariff- and delay-free movement across the border.
It’s not just industry that could be affected: you might need an International Driving Permit to drive in the EU, have to sort different car insurance, or likely need a visa waiver to enter European countries.
Simple, right? Well, no. Frankly, trying to predict Brexit is an impossible task – which is exactly the problem for those people and firms whose livelihoods could depend on how and when it happens. What we can predict is that, whatever form Brexit takes, it will have a major impact on the British car industry.