The impact of Brexit on the UK and the EU market is huge, even though it hasn’t actually proceeded yet, as many companies are making moves to secure their future based on the conditions that Brexit might lead to.
In September 2019, the European motor industry issued a warning regarding the effects that a ‘no-deal’ Brexit’ could have on the European Union, as well as the UK itself. According to them, if the current World Trade Organisation tariffs take effect as a result of a ‘no-deal Brexit’, then the prices of new cars, commercial vehicles, and auto parts will go up by 10%, 22%, and 4.5%, respectively. If such a case were to happen the EU’s “just-in-time business’ model would suffer catastrophic damage, resulting in delays and increased operation costs across the board.
However, in spite of that prediction, and the fact that it’s reported that about 80% of all replacement auto parts fitted to British cars are imported from other countries, with the EU accounting for about a third of that, Fleet Assist instructs the fleet industry not to panic. According to the supply chain management firm, a lot of the component suppliers that they talked to were preparing themselves for the worst.
The firm conducted a survey of component suppliers in the UK, and the overwhelming majority reported that they had an increased supply of parts, several weeks’ worth, set aside in case of the worst happening. On top of that, a lot of them also reported that they’ve gone and increasing their stocking levels by an additional six months, which they’ll hold on to until the market’s status is cleared up post-Brexit.
National distribution centres across the country have also been seeing an increased amount of investment from companies, showing that the UK’s manufacturing industry is doing whatever steps they feel is necessary in order to minimize possible disruptions and ensure that the market’s continuity holds.
That being said, Fleet Assist has stated that there are factors in the market which can’t be controlled, making it impossible to account for every eventuality in the case of a ‘no-deal’ Brexit.