Brexit Seems to Have Really Screwed Up Britain's Car Market

by Matt Posky

October 17th, 2017 3:11 PM

brexit seems to have really screwed up britains car market

While some of Europe saw modest auto sale gains through the first nine months of 2017, the region has mirrored North America’s decline in deliveries since the end of the summer. The United States saw eight consecutive months of declining sales this year, with a positive bump in September and better than expected volume in Canada.

Europe, meanwhile, saw the inverse. Passenger car registrations fell 2 percent year-over-year to roughly 1.43 million deliveries in September, despite August seeing a 5.6-percent improvement. Overall, 2017 has the makings of a unsatisfactory sales year for both regions. But Europe seemed to be doing alright before the U.K. suddenly stopped buying cars.

British registrations took a massive nosedive after Brexit. By September, it represented a monthly decline of 9.3 percent, compared to Germany’s 3.3 percent slide. Even though the rest of the continent saw a gain in sales, having Europe’s two largest markets lagging guaranteed the net loss.

The U.K.’s decline represent sixth straight months of dwindling deliveries. Bloomberg attributes the fumble to a weak pound and unsuccessful Brexit negotiations. In fact, trade deals have been idled since the British Chambers of Commerce downgraded its medium-term economic growth outlook in early September.

Still, we shouldn’t attribute Britain’s lackluster sales performance entirely to Brexit. Shorter average commuter times within the United Kingdom have made ride-hailing apps like Uber and Lyft exceedingly popular. The relatively recent PCP car loan trend also appears to have plateaued and analysts are becoming fearful that it has created a dangerous bubble within the automotive industry — akin to what took place in the housing market during the Great Recession. British household indebtedness is also already extremely high and average household savings is virtually nonexistent.

Combine that with governmental promises that internal combustion vehicles will be banned by 2040, fairly high auto taxation rates (compared to the U.S.), a market hampered by right-hand drive models that cannot be sold in other parts of Europe while also leaving consumers with fewer options, and the United Kingdom doesn’t really look like the greatest place to own a car.

While other countries have promised similar regulatory measures and already implement fairly aggressive taxes on automobile ownership, the U.K. seems to be the one suffering the most. As a result, PSA Group said on Monday it has decided to eliminate 400 jobs at Vauxhall’s Ellesmere Port facility in Britain to cope with declining sales.

Of course, Vauxhall has problems that extend beyond the U.K. But the region’s sales slump is hurting other automakers popular among British consumers. New vehicle deliveries from Ford Motor Co., the U.K.’s best-selling brand, fell 13 points across Europe last month.

For the whole of the year, U.K. sales down 3.9 percent against 2016’s figures through September. The most noticeable gap comes from diesel sales. According to SMMT vehicle registration data, diesel-powered vehicles saw 21.7 percent fewer deliveries in September and a 13.7-point loss for the year so far.

No other segment has bothered to fill that void. Sales for all vehicle types are down within Britain this year. The only exception is alternative fuel vehicles — which saw massive gains in 2017. Sadly, that 4.6-percent market share isn’t growing fast enough patch the gaping hole left by internal combustion models.

#AutoSales #AutomotiveSales #AutomotiveTrends #Brexit #Europe #EuropeanAutomotiveIndustry #Government #IndustryNews #U.K. #UnitedKingdom

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Big Al from Oz on Oct 17, 2017

Brexit. The worse populist decision by any politican this Century. Putting aside, stagnant incomes, mixed with a depreciating currency, along with the expected inflationary pressures, the UK's auto manufacturer's are facing a declining export market. The EU is the UK's biggest market by far and it will shrink substantially. This doesn't factor in the declining financial sector that will move offshore. The Brexit supporters deserve ehat's coming yheir way, just like the supporters of the dismantling of NAFTA.

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- Ubermensch on Oct 18, 2017
  
  It's mostly old people that voted for it. They will be dead before most of the consequences will affect them. The Boomers legacy is starting to look pretty bad. Boomers are probably the most selfish and short sited generation in recent history.
  
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- 2manycars on Oct 18, 2017
  
  @Ubermensch Old people are the ones with experience and wisdom. The young are inexperienced, foolish, and easily manipulated by the promise of shiny baubles. In fact you can make a very good case for raising the voting age to at least 40 if not 50. The award for the most selfish has to go to the Millenials. A gaggle of useless, chuckleheaded slackers if there ever was one. I can really understand why some animals eat their young.
  
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- Ubermensch on Oct 18, 2017
  
  @2manycars It was boomers that raised the millennials so they only have themselves to blame. I used to feel some animosity towards millennials, but now I see what a bum deal they are getting thanks to the boomers and I only have sympathy for them in their plight. I'm just glad as a Gen Xer I am largely ignored by the fighting between boomers and millennials. FYI- experience and wisdom is bullshit when you have a generation that is largely immune to facts and knowledge. What wisdom they do have is used only for personal gain at the expense of everyone and everything else. I'll take the foolish, idealistic, altruistic vision over that nonsense.
  
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- Big Al from Oz on Oct 18, 2017
  
  Ubermensch, I agree with you. I believe it's a combination of selfishness mixed with remember the 60s and 70s all was good and we prospered. Many Boomers, as some on this site are very short sighted and forget that their parents lived in a rapidly changing and crisis ridden world and they made what the Boomer have. I'm a Boomer and I remember my Great Grandfather who was born in 1878, 14 years after the Civil War. He died in the late 60s and saw everything from using a candle to electricity, TV, refrigeration, cars, stereos, all kitchen appliances and on and on. The modern world that the Boomers were raised in. He would roll in his grave at the nastiness and selfishness that has become America. His generation made America Great, not the Boomers or Princess Trump.
  
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- TW5 on Oct 18, 2017
  
  Great Britain traveled the globe for centuries in search of natural resources to feed their economy. These trading arrangements were the source of their power, and the reason Great Britain was once the richest nation on earth. Joining the EU, and unraveling a centuries-old trading system which brought them to global prominence, was perhaps the worst decision the UK has ever made. It's former colonies are still flush with natural resources. We can power their economy, and we can easily set up reciprocal trade agreements that will allow them to sell to more affluent consumers outside of the EU. They will have an abundance of cheap food and energy, and they will have a huge market to sell manufactured goods. The only people who are sour about Brexit are the bankers, who were looking forward to Wall Street money as China realigns trade to focus on the exploitation of Europe rather than the US.
  
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- Big Al from Oz on Oct 18, 2017
  
  TW5, Read up on history and the gradual decline of Britannia occurred when Queen Victoria reigned. The UK also had to contend with a dysfunctional European continent. This lasted until the end of WWII. By then the UK had lost much of the Commonwealth and turned to the EU to make a living, and a good living it made. Two Wars took its toll on the UK as well, which also contributed significantly in making America Great.
  
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- Ghostwhowalksnz on Oct 18, 2017
  
  Cant be the worst populist decision made by a politician- it was a decision of the majority in a yes/no referendum by the whole population. UK previously had kept out of the EU 'no internal borders' arrangements- turned out OK for them UK previously decided to keep the £ as their currency instead of euro- that turned out really well for them. They will be fine with the Brexit- that have been through much worse and survived.
  
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- TW5 on Oct 19, 2017
  
  @ Big Al from Oz I didn't claim that the EU was the downfall of the UK's global preeminence. I argued that joining the EU was the end of UK attempts to economically distinguish themselves on the continent or on the globe. It was a poor decision based upon faulty economics and unfounded fears of absolute trade advantage in the US, Canada, and Australia. Since joining the EU they've lost industry and natural resource production, and, if they had chosen Bremain, the EU would have eventually eliminated the pound. This would have limited the UK's ability to affect monetary policy, and it would have consolidated control in Brussels. Look at the UK's median income performance. It's subpar. The US, Canada, and Australia have all basically risen to the same plateau by leveraging our resources and trading among ourselves and with Asia. Our median income is over $10,000 more on a PPP basis than the UK. I don't want to disparage the UK, but they took a vow of poverty when they signed the Faustian deal with the EU. If they had maintained the old trading relationships, regardless of the unilateral termination of Bretton Woods by the US, the UK would be considerably more wealthy today.
  
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Roberto Esponja on Oct 18, 2017

"a market hampered by right-hand drive models that cannot be sold in other parts of Europe while also leaving consumers with fewer options" I truly can't comprehend why there are still countries that stick to driving on the left. Back in the 1960's-70's when several countries switched to driving on the right, ALL of them should have done so. Right-hand-drive is unnatural. I realize this opinion is going to stir up a lot of hate from those who think driving on the left is better. So be it...

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- Ghostwhowalksnz on Oct 18, 2017
  
  Samoa just recently switched over from RHD to the 'un natural' LHD. In Asia theres quite a list of LHD Bangladesh Bhutan Brunei East Timor Hong Kong Indonesia India Japan Macau Malaysia Nepal Pakistan Singapore Sri Lanka Thailand and Africa: Botswana Kenya Lesotho Malawi Mozambique Namibia South Africa Swaziland Tanzania Uganda Zambia Zimbabwe
  
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- Flyf2d on Oct 18, 2017
  
  Most people are right handed, therefore stronger and more dexterous* with their right. If you're doing something varied requiring accuracy like I dunno, steering and something needing repetitive less accuracy like gear changing , doesn't a right left split make sense ? Hence right hand drive makes sense. Immaterial now that everyone has a slush box transmission and uses the right hand only for their phones. *Yes, I know Dexter means right
  
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