9:00 am, April 24, 2017
NEARLY five million Britons have altered their car-buying plans as a direct result of Brexit, according to a new report published today.
The Close Brothers Motor Finance report, entitled ‘Britain Under the Bonnet’, looks at consumers’ attitudes and car-buying behaviours – along with views from dealerships across the country.
According to the report, 71 per cent (circa 28 million) of current drivers are planning to buy a car or replace their current vehicle in the next three years. However, 17 per cent (4.7 million) of them have said that the decision to leave the European Union has made them more likely to buy a used car, seek a cheaper model, or hold off on their purchase entirely – all of which could have a knock-on effect for the manufacturing industry, car dealers across the UK, and the wider economy.
The figures are based on a telephone survey of 445 UK car dealers carried out between September and October 2016, as well as a consumer survey of more than 2,000 UK adults last October, including 1,200 car owners.
The UK’s automotive industry currently employs 800,000 people and contributed £71bn to the economy in 2016, according to the SMMT, which has also reported record registrations.
However, there are concerns that the UK’s decision to leave the EU will result in the end of this golden period, with industry experts predicting an increasing cost of vehicles and a decline in manufacturing over the coming years. Nearly half (43 per cent) of the UK’s car dealers surveyed for the report cited a potential recession as the biggest threat to their business. And investment in the industry has already taken a hit, dropping from £2.5 billion in 2015 to £1.66 billion in 2016.
James Broadhead
James Broadhead, chief executive of Close Brothers Motor Finance, said: ‘The automotive industry is unquestionably one of the leading lights of the British economy, with turnover in 2016 totalling a record £71.6 billion. But despite having been an undeniable growth industry in recent years – with seemingly endless records set for car registration numbers – it’s difficult to dispute that we are entering into uncertain times for our industry, especially now Article 50 has been triggered.’
Colin Tourick, professor of automotive management at University of Buckingham Business School, said: ‘The Britain Under the Bonnet report makes clear that Brexit is casting a shadow over the industry. Whilst we can hope that the economy won’t receive too much of a jolt from Brexit, the fact is that no-one knows what will happen. And economic uncertainty makes people wary of making major decisions – like replacing their cars.’
The report does find cause for optimism, though – a majority (65 per cent) of dealers surveyed said they expected their business to grow in 2017 and beyond. And nearly half (42 per cent) of dealers said their business was actually performing better than before the referendum vote, which runs parallel to the better-than-expected performance of the economy in general.
Main image: Gareth Fuller/PA Wire/PA Images
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