9:56 am, June 15, 2016
UK CAR sales will decline over the next few years if there is a vote to leave the EU, according to a new report.
The Economist Intelligence Unit research firm predicted that Brexit would result in a recession in 2017 and said that ‘no car company will benefit from that’.
New car sales reached an all-time high of 2.6 million in 2015, up six per cent on the previous year.
The EIU report warned that a Leave vote on June 23 would lead to a sales ‘tumbling’ as ‘economic stagnation weighs on consumer sentiment’ and the commercial market is ‘subdued’.
It went on to say that Brexit would initially lead to ‘substantial disruption’ over regulations, which could have an impact on product specifications and employee rights.
Although many manufacturers have expressed a desire for a cut in red tape, those who still want to sell to the EU would think twice about making product changes, according to the study.
The report did state that there were some possible advantages for the automotive industry in the event of a Leave vote on June 23.
It noted that the UK is ‘a sizeable market in its own right’ and new trading opportunities could emerge if it becomes easier to negotiate agreements.
Making it harder for foreign-based manufacturers such as Volkswagen to sell in the UK would help domestic producers, the report said.
It added that Toyota, which has plants in Derbyshire and North Wales, has announced it has no plans to leave the UK following a vote for Brexit, while Honda has stayed ‘non-committal on the issue’.
But the EIU concluded: “The biggest question, however, is over what would happen to the economy after a vote to leave.
‘Our prediction of a 2017 recession would almost inevitably mean a slide in UK vehicle sales over the next few years.
‘No car company will benefit from that, regardless of the longer-term arguments.’
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