October big month for Brexit impact
Brexit has yet to have an impact on Britain’s auto industry, but experts say that European sales figures for October will reveal for the first time if the result of the vote has undermined consumer confidence. The Detroit News reports that sales in the EU rose 7.2 per cent in September. Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders in the UK, says that September is a registration plate change month in the UK, which spurs sales, and orders were placed many months in advance. October’s sales numbers, which are due to be posted next week, will provide the first solid evidence of whether Brexit has had any impact. IHS Automotive says its latest data shows that Europe is returning to normal after a shaky summer, and sales are expected to grow by almost 6 per cent to 14.58 million for the rest of the year, before flattening in 2017. Carlos da Silva of IHS Automotive says: “[October] might begin to answer whether the impact of the Brexit vote will start to reverberate into a depression in private and corporate demand, as well as heightened tactical sales to compensate. However, we see the general picture as remaining positive for the near term. “We do not see the market reaching a tipping point shortly, and a general deceleration was already embedded in our forecast before the Brexit decision.” However, investment bank Morgan Stanley says the European auto market is very exposed to British consumers, who represent 20 per cent of demand in Western Europe. Morgan Stanley analyst Harald Hendrikse says: “With the uncertainty regarding the Brexit vote and pound sterling weakness, we continue to believe a slowdown in the UK market remains a key risk for 2017. We forecast an 8 percent decline [in U.K. sales in 2017] which impacts also on Western European growth forecasts.” In a presentation to investment researcher Evercore ISI, carmaker Ford says the fallout from Brexit has yet to be seen, but it is a significant market risk, and is a question of “when” not “if” sales fall from current levels.
