How The Brexit May Affect Aussie Car Prices?

How The Brexit May Affect Aussie Car Prices?
October 5, 2017 allcredit

How The Brexit May Affect Aussie Car Prices?

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  • Thank you Cheryl, I love my new car and it’s so easy to pay for my petrol and servicing using my allcredit fuel card.  Ill never buy a car any other way again.
    Elena, WA
  • Cheryl provided me with amazing service and explained everything to me in a way that was easy to understand.  I would not hesitate to recommend allcredit to anyone.
    James, NSW
  • Allcredit was easier to deal with and much cheaper than my salary packaging company
    Ross, VIC

The shockwaves are still spreading throughout the globe, from the sudden call for ‘Brexit’, or Britain’s departure from the European Union. On June 23rd, 52% of voters decided to leave the EU, and every industry is watching closely for repercussions- including the automotive industry.

What Are The Major UK Car Companies?

The United Kingdom boasts some of the finest car production plants, such as Ford, GM (Vauxhall), Honda, Jaguar Land Rover, Nissan, McLaren, Morgan, PSA Group (Peugeot), Aston Martin, BMW (Mini and Rolls-Royce), the Volkswagen Group (Bentley), and Toyota.

The Society of Motor Manufacturers and Traders (SMMT) has incredible figures, with 1,587,677 vehicles leaving UK factories in 2015, or one every sixteen secondssetting a ten year high. These factories are highly reliant on the demand for British exports, with 77.3 percent -1,227,881 vehicles- being shipped off overseas to excited customers.

If you think that Europe doesn’t hold much sway in the British car exports, you’re wrong. In fact, 706,032 cars, or 57.5 percent of British exported vehicles, were sent over to Europe, compared to just 2.8 (1,155,408 vehicles) percent sold in Australia.

How Will They Be Affected?

The entire Brexit process is unprecedented, and nobody is truly able to make an accurate prediction about what will happen next. However, many car makers operating plants have stated to the media that they have no intentions of changing their plans- but there have been murmurings in both directions. Some have confirmed that this may change if the economic uncertainty brings about a recession in Britain, which spreads to the Continent- which is one of the more popular economic forecasts. This may force car manufacturers to pump the brakes, and scale back production or investment plans for the country.

The British public has chosen a new future out of Europe. Government must now maintain economic stability and secure a deal with the EU which safeguards UK automotive interests. This includes securing tariff-free access to European and other global markets, ensuring we can recruit talent from the EU and the rest of the world and making the UK the most competitive place in Europe for automotive investment.

The SMMT

Since the EU conception, the common market has allowed for unrestricted tariff-free trade between all 28 member states, including Britain. This also extends to countries which have negotiated individual agreements with the EU, while remaining separate, such as Norway, Switzerland, Iceland, and Liechtenstein. With such upheaval in the EU, the United Kingdom will now need to go back to the drawing board and create new plans for social and economic frameworks- and Norway is looking like a viable example. However, commentary suggests that the European Union may be less than forgiving for Britain’s roguish ways, and may attempt to set an example to deter other countries from following suit.

What About Us?

With the pound’s reliability in question, the yen has become the ‘safe’ currency- with the Australian dollar falling by 18 percent against the yen over the last year. This may affect the Japanese car market as well, which produces some of Australia’s favourite cars, however there are hints that now is a great time to start looking at a new British vehicle as prices are uncertain and liable to drop in the future.

If you’re in the market for a new car, talk to your employer to see if a car novated lease is a good option. By novated leasing your car, you could easily and affordably finance the vehicle you’ve been dreaming of- and save money on your taxes. Call Allcredit, and ask about our easy application process and most competitive novated lease options in Australia.

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