Article by ForexTime
Market volatility and low confidence resulting from last week’s UK referendum shock majority vote to leave the EU are playing out in practical terms quite significantly in the UK’s automotive industry.
The promising growth of 26% over the past year in British car production and record turnover, reported in May, is particularly dependent on export demands, with over 80% of products being sold outside the UK; should unrestricted access to the European market be detracted, this situation is likely to change, and rapidly so, as stated by the Society of Motor Manufacturers and Traders.
British car plants are largely owned by foreign industries, and major efforts were made to convince voters to stay in the EU. Now that this possibility has been scrapped, guarantees are being sought that free access to their biggest market will not be cut off.
Key factors in the success of Britain’s automotive industry expected to take a blow include cost, ease of business, global influence of the industry, recruitment of workers from abroad, and most significantly, uninhibited access to the single market, or as described by British PM David Cameron, the best access.
The EU remains firm in its stance that the free movement of capital, goods, services and workers is not a topic open for discussion, as made explicit during the summit, and that no exceptions will be made for any country desiring access to its common market.
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