Brexit, the economy and house prices part 5

TrickyTree83

ilovehouses wrote: »

The report assumes all of the costs of tariffs and currency devaluation are passed to the consumer. I've just bought a new BMW and have been watching prices for a while - the currency effect hasn't been passed on (yet at least). They're luxury items and work on large margins so there's scope to let the increase costs ride. BMW et al aren't going to see sales fall by 650,000 in the first year without at least throwing money at the problem for a while.

I also don't see how RoW car sales will increase given they are already subject to tariffs and currency unless people buying at the luxury end are going MSE and move down a brand or two.

Even if true and the UK car industry picks up 50,000 of the 650,000 that's small consolation. Can you imagine the effect that would have - how many UK jobs would be lost if new car sales fell by 600,000 in the first year of a hard brexit.

I'm no expert on the automotive sector. I don't know if you are either but I'm pretty certain Deloitte aren't to shabby at the job they do.

Their report predicts gains for the UK, and this was commissioned by the German automotive industry. Don't ask me how they did it, I only read the summary papers. It's shocking reading if your intuitive thought was like mine where I was sure the UK automotive industry would be hit just as hard as the German and French.

If they turn out to be wrong well the Germans just wasted money on a year long research paper that tells them less about what they want to know than a sheet of Andrex.

Arklight

May crumbles in face of back bench Brexit opposition.

http://www.independent.co.uk/news/uk/politics/brexit-legislation-theresa-may-eu-withdrawal-plan-rebellion-mps-additional-bills-immigration-trade-a7999061.html

Unfortunately, she also crumbles in the face of ranting Tory Right hard Brexit opposition.

It's pretty difficult to crumble both ways at once.

Crumbs.

Carl31

HAMISH_MCTAVISH wrote: »

Indeed it is.



And yes you can be sure our weathervaning politicians will follow shortly.

That poll was based on 1600 people

Or 0.00002% of the population. Not sure we can really class that as representative of the UK as a whole

gfplux

TrickyTree83 wrote: »

I'm no expert on the automotive sector. I don't know if you are either but I'm pretty certain Deloitte aren't to shabby at the job they do.

Their report predicts gains for the UK, and this was commissioned by the German automotive industry. Don't ask me how they did it, I only read the summary papers. It's shocking reading if your intuitive thought was like mine where I was sure the UK automotive industry would be hit just as hard as the German and French.

If they turn out to be wrong well the Germans just wasted money on a year long research paper that tells them less about what they want to know than a sheet of Andrex.

Like everyone else I am no expert on the motor industry. However all manufacturers have had a long time to make adjustments and contingency plans. A study conducted now will have different results to the original study. A study covering July 2018 to December 2018 will have substantially different results if the talk of "No Exit deal" continues.

The manufacturing of a car in Europe we all agree is a very complex thing. However there are many experts spending time looking at product/part sourcing and given enough time between now and end March 2019 substantial changes can be effected.
These changes involve costs and no manufacturer wants to incur them unless necessary but I am sure the trigger will be pulled on some substantial changes very shortly.

There is time for example for a substantial business partner of any car company to build and fit out a new parts factory closer to the point of production. That new factory could even be in Britain but don't expect any announcement about it.

These changes are industrial secrets so don't expect a running commentary about it.

As already mentioned shareholders do not support management who don't plan and execute when the market is changing, particularly when these changes are being well signposted. For information 50% of the shares of BMW are owned by two people so it is very easy for them to "talk" to management.

HAMISH_MCTAVISH

Rather than arguing back and forth about hypotheticals why not read this summary of the particular challenges facing the UK automotive industry with Brexit - along with some interesting quotes from industry executives.

Why the UK car industry is getting worried about Brexit

As for whether or not the car manufacturers think Brexit is likely to be good or bad for UK car manufacturing...

Overall investment figures in UK automotive were sharply down, according to the SMMT, to the lowest on record last year of £1.66bn, and has halved again so far in the first half of this year to just £322m

http://news.sky.com/story/brexit-forensics-why-car-industry-is-getting-worried-11041671

Thrugelmir

gfplux wrote: »

There is time for example for a substantial business partner of any car company to build and fit out a new parts factory closer to the point of production.

Where's the skilled workforce going to come from to run this plant?

gfplux

Thrugelmir wrote: »

Where's the skilled workforce going to come from to run this plant?

That's a good question. Although manufacturing is very mechanised the need to hire skilled staff or train semi skilled will pressure the time line.

This from the article from Sky about Jaguar Land Rover under Indian ownership.
http://news.sky.com/story/brexit-forensics-why-car-industry-is-getting-worried-11041671
You probably read it.

"But Jaguar Land Rover is perhaps the most important, as it is a great success story, less connected to Europe. In theory it should be delighted by the opportunities of a cheap pound and trade deals with the US and China - big consumers of their high-end cars. And yet it is deeply concerned by what it hears from both sides. Trade deals with the US and China? "If only life were that simple," says Mr Goss, pointing out that 40-50% of its parts including expensive German gear boxes are imported from EU suppliers. Cheap pound outweighs tariffs? "That's absolutely not our perspective. We want today's arrangements and access to the best people." JLR's British success, under Indian ownership, has been built on attracting 10,000 of the best engineers. It wants to continue poaching German executives from their big car companies. The atmosphere around post-Brexit migration policy is not helping."

Perhaps there are plenty of skilled EU nationals working in the UK who might be tempted to move back inside the EU27.

Thrugelmir

gfplux wrote: »

That's a good question. Although manufacturing is very mechanised the need to hire skilled staff or train semi skilled will pressure the time line.

Mechanised \ robotic plants require skilled support staff to operate 24/7. Takes years to plan and build such a facility from bare earth.

gfplux

Thrugelmir wrote: »

Mechanised \ robotic plants require skilled support staff to operate 24/7. Takes years to plan and build such a facility from bare earth.

Who knows. Perhaps you have recent experience. My experience from the Far East is very out of date. In the 80's whole factory's machinery were loaded on transport planes and were producing product within weeks in another Country. It is amazing what can be accomplished when profits are threatened.
Remember Companys may have been planning since June 2016!
Perhaps somewhere bulldozers have already broken earth?

gfplux

TrickyTree83 wrote: »

My word...

That post is dripping with tin foil hat hyperbole.

It would appear you're not on top of your research as you appear to want us to believe.

Points 4, 5 and... 5 (???) are of particular interest to me :rotfl:

Just for you Tricky. I like your idea of ignoring what will happen if we have a no leaving deal. Tin foil hat hyperbole is just brilliant.
You are actually denying that the following would not happen. Interesting!

A No deal has implications for trade, jobs and supermarket shelves but what about all the other things.

If Britain leaves the EU without a deal in March 2019 (530 days and counting) then

1) no protection for EU citizens working for the NHS, strawberry pickers etc
2) court action from the EU to recover its money (which will last a lifetime)
3) A hard border between Ireland and N Ireland
4) Chaos at the ports
5) No flights between Britain and EU
6) No Medical Isotope to treat cancer patients. (due to Euroatom)
7) further erosion in the value of the pound. Hurrah or Boo?
8)
9)
Etc, etc