A white paper, published by Matthias Holweg, automotive expert and professor of operations management at Saïd Business School, University of Oxford, highlights the damage the Brexit process has done to the UK car industry. Anna Tobin reports
Matthias Holweg’s paper entitled Death by a thousand cuts: The strategic outlook for the UK automotive industry beyond Brexit, concludes that the UK automotive industry has already lost 9% of its volume as a direct result of Brexit and that overall investment has plummeted by 80% over the last three years. If the UK ends up leaving the EU without a trade deal, Holweg estimates that the UK would lose a further 35% of its current production volume over the next ten years.
Holweg also fears that a customs union ‘compromise’ could further damage the automotive industry, because volume car production cannot be sustained under a WTO tariff regime, and a customs union would make UK plants less competitive. He also warns that the resulting damage to skill and supply bases could also have further adverse effects on aerospace and defence manufacturing.
“The great and present danger is that the decisions on where to produce new models will continue to go against the UK, until existing plants here become sub-scale and thus uncompetitive, and will close,” explains Holweg. “This would invariably lead to a hollowing-out of the UK’s component supply chain, effectively condemning the automotive industry to a slow ‘death by a thousand cuts.’ Whichever way one looks, it is hard to underestimate the threat Brexit represents to the future of UK manufacturing.”