Despite Brexit Delay, BMW And Peugeot Decided To Shut Their Plants In The UK

  • Apr 03, 2019 BST
  • Team Kalkine
Despite Brexit Delay, BMW And Peugeot Decided To Shut Their Plants In The UK

Luxury car maker BMW announced to close its mini plant located in the UK for four weeks from Monday onwards and Peugeot announced that its Vauxhall car plant would shut for two weeks, both the companies have explained that this move was decided a month ago to prevent businesses from any disruption going to arise because of Brexit. BMW, which build 15 per cent of the UK's car, shifted its annual summertime shut down to April to prevent the company from any short-term supply chain disruption in the wake of a no-deal divorce from EU. 

Peugeot, which manufactures Astra model and sale under the brand of Vauxhall in the UK and Opel in the European continent, has brought forward its decision to shut down plant which was decided at the end of 2018.

Peugeot management announced that the Ellesmere Port car plant, is shut for two weeks and the Luton van plant is shut for three weeks, both the plants have employed around 2,362 employees.

Other car manufacturers like JLR and Honda also faced the same situation and being forced to shut down their plants, which will lead to indolent factories at the time when they would ideally be making cars to export while Britain enjoys free ingress to the European market.

Parent of Peugeot, PSA bought Vauxhall and Opel brands from General Motors in 2016, earlier General Motors was selling them after years of losses. The Vauxhall and Opel division of PSA reported its first profit after PSA put in place a turnaround plan.

The recent move by the British car makers indicates that Brexit could create severe disruption in the supply chain of carmakers. A majority of the auto parts they use to procure for the European Union.

British carmakers are piling up auto parts to minimise disruption of imports mainly from the European Union. Car manufacturers across Britain are facing a number of risks if there is a hard or no-deal Brexit, including delays to the supply of ports and finished models, new customs red tape, need to alter models and an up to 10% levy on finished models.  Ineos, a petrochemicals company, is also due to decide the location for its off-roader albeit a decision is due on whether JLR will manufacture its electric vehicles in its home market.

Car manufacturers across the globe are facing a tough time, from Brexit uncertainties, regulatory issues on the use of diesel cars and the transition to the electric vehicle.

As per the latest figures revealed by the Society of Motor Manufacturers, Britain car production plunged by 15.3 % in February 2019 to 123,203 units. Softening demand in the UK and European and Asian market has led to declining output for the ninth consecutive month.

On a year-on-year basis production in home and export market plunged by 11 per cent and 16.4 per cent respectively. On a year-to-date basis output declined by 16.8 per cent, while home market demand plunged by 8 per cent.

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