Impact of Brexit on the UK Automotive Industry: A Range Rover Analysis

This report examines the impact of Brexit on the UK automotive sector, with a particular focus on the Range Rover case study. The introduction highlights the significant economic changes and challenges faced by UK businesses, especially in the automotive industry. The literature review analyzes the consequences of Brexit on UK GDP growth, exploring factors like trade, migration, and foreign investment, as well as the opportunities and challenges of free trade. The report then delves into the effects of Brexit on the UK automotive sector and its workers, detailing job losses, production shutdowns, and the impact on stakeholders. A SWOT analysis of Range Rover is presented, identifying its strengths, weaknesses, opportunities, and threats, followed by recommendations such as focusing on hybrid vehicles and automation. The conclusion emphasizes the need for proactive measures to mitigate the negative impacts of Brexit and support affected workers.

Inquiry Based
Learning
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Table of Contents
Introduction......................................................................................................................................3
Literature Review.............................................................................................................................4
Discussion and Recommendations..................................................................................................6
Conclusion.......................................................................................................................................8
REFERNCE.....................................................................................................................................9
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TITLE – “To Understand the BREXIT Impact on UK car industry (Range Rover). A case study
on Range Rover.
Introduction
Brexit is a phenomenon that has impacted all the countries across world but businesses in
case of UK have been impacted to a great extent. There has been lot of change taking place in the
economy of UK and it is resulting into major impact on Automotive sector of UK (Bailey, 2017).
Present report is based on research on different articles that are related with GDP growth in UK
automotive sector because of brexit different ways exit has affected automotive sector and the
employees working in this sector.
Aim: “To develop a understanding of the impact of Brexit on the automotives sector of UK”
Objectives
 To understand the consequences of BREXIT on the GDP growth of UK
 To Collect information regarding Brexit means for UK automotive sector and their
workers
Research Questions:
 What do you understand the consequences of BREXIT on the GDP growth of UK?
 What do you understand by regarding Brexit means for UK automotive sector and their
workers?
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Literature Review
Consequences of BREXIT on the GDP growth of UK
According to views points of Gemma Tetlow and Alex Stojanovic, 2018, Brexit is a
phenomenon that is going to lead and make many significant changes in the relationship of UK
with other European Nations. There have been many studies that have been published which
reflect what will be the effect on the overall economic performance for UK in the long run
because of brexit. understanding the answers are ranging from prediction that drives it is going to
lead towards a future economic output by 7% with a prediction that it might reduced by 18% in
comparison to what would happen if you the member of this bloc. The overall GDP might get
infected in a negative manner because of some of the issues that have direct and indirect impact
on the overall GDP of this country. Many economist have addictions that brexit might lead
towards greater trade that can help in boosting demand for the country's products but also their
overall productivity. Reason is there are many factors apart from tree that are affecting the
productivity of organisation or a country. While about the consequences that brexit could do to
the growth of UK overall economy it can be said that there are several other factors as changing
migration, population and foreign investment as three major factors that could impact the
economic growth of UK (UK automotive industry feeling the heat of Brexit, 2019). Productivity
and trade are one of the most important factors can affect the economic output of UK. Apart
from this it can also be said that brexit somewhat offers opportunities of change UK as they can
work towards reducing the overall cost to business.
Economist believe that are for free trade projects exit can boost overall economic output
by 7% in a time period of 15 years. On the other hand economist for free trade assumes that
breaks it might eliminate all the barriers of trade that are taking place between UK and other non
EU countries. It is said that open phenomena that is going to effect and have different impacts on
different regions and different sectors (Pryce, Nielsen. and McCabe, 2019).
Any groups are impacted because of the overall impact exit can also have a very adverse
impact on the UK economy segment of the society is going to hit harder as there will be increase
in overall prices of essential commodities on the other hand, Richer segment of the society can
get affected by rise of the price of various services and also reduction in prices.
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Regarding Brexit means for UK automotive sector and their workers
According to (Understanding the economic impact of Brexit ,2018 ), Brexit is something
that is going to affect not only UK but all the different industries that are growing very fast. UK
automotive industry is one such industry, the biggest loss making companies will be those are
based on UK and includes various foreign automakers and vehicle manufacturing plants that are
part of this country. Before brexit UK has been perceived as the major strategic location for
penetration of all the European markets. The impact on the British Automotive industry can be
understood by two major factors firstly the reaction of brexit referendum and different political
struggles has resulted into falling sharply of the British Pound and lowest in 30 years that has
both positive and negative impact. Positive impact can be that exports have been more prices
competitive an adverse impact is that it has that to announcement of the overall cost of various
imported goods.
Secondly, the UK based manufacturers have been benefited from the domestic demand that
has rise in recent years because of the integration of UK in you as a single market.
In case of the job market going to hurt hard because of the automotive industry that is employing
approximately 823000 workers. It consists of writing jobs from sub Industries such as repairs
and maintenance and also financing. The biggest automotive brand of UK that is Range Rover
has date of approximately 10% of their 40,000 strong workforce and millions of dollar are blown
away in the contingency planning related to exit team. This has affected extremely these people
who were employed in such automotive plants like Range Rover and their family in long run as
the basic source of livelihood have been taken away from this family. There will be a major
concern for all the Producers and Consumers of automotive industry because of the presence of
random as there will not be in terms of following sales but there is a great impact on the rising
cost that is also because of the hit to the job market.
There has been a statement made by BOD in Range Rover, production shut down because of the
UK plants being close will result in short of cars to sell in the present financial year that was
ending March 2020. Week long shutdown that started in November 4 2019 and it lead to large
number of vehicles that were clan to be sold down in the last quarter of the Year 2019. This
shutdown resulted into loss in cost of production of approximately 12000 cars that was a huge
loss for this brand and it resulted into loss of jobs of all the workers who were associated with
such production of vehicle. Lower has basically three plants in UK from where they are
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exporting cars across different parts of the world that was totally affected and people working in
these plants were also affected as there cost of many jobs approximately 10000 workers the
provided figure that have lead to people suffering because of the Brexit referendum in UK. The
production of cars that fall about 16% in a period of first 9 months to a figure of just 1 million
cars it lead to a complete breakdown of the industry in the year ending 2019 because of Brexit
referendum (BREXIT: IMPACTS ON THE UK AUTOMOTIVE SECTOR, 2017). All the
stakeholders that were associated with this greatly affected but internal stakeholders that is
employees and customers were the two major segments that were affected mostly in the negative
manner as customers have to face shortage of cars and prices in the prices of vehicles on the
other hand is offer because of losing of their jobs that are used to provide them basic source they
are earning. The overall economy of UK suffered because of rising rate of unemployment impact
on overall GDP growth as automotive industry is major part of GDP in this country.
Discussion and Recommendations
There is a SWOT analysis of Range Rover that can help in understanding the analysis of this
brand in detail:
1) Strength: Range rover has biggest land that it is one of the richest Heritage and having high
brand image. The association with Jaguar brand equity increase in the credibility and they have a
vision of making innovative products in future according to expectations of their customer.
Range Rover is offering highly environment friendly cars that have lower emissions of harmful
gases for the organisation and the upgraded Technologies such as data connectivity and machine
learning incorporation of this brand with new technologies.
2) Weakness: The recent referendum of brexit has affected the Range Rover in terms of all their
stakeholders getting impacted because of cotton production in the year 2019 November because
of the closing of their plant has lead to loss of sales, people losing jobs, reduction in overall
revenue (Karlsson, Melin and Cullinane, 2018). Apart from this brand has affected because of
other brands such as Mercedes Benz, BMW and Audi recent years.
3) Opportunities: There are many opportunities for Range Rover such as they can focus on
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increasing the automation towards more advanced Technologies. target the market that is willing
to spend more must be approached by usage of marketing technique there should be focused on
high customisation where choices and preferences have to be taken into High consideration that
is a big opportunity for this brand to recover their loss of sales.
4) Threats: There are many Threats associated with Range Rover such as the brexit referendum
has lead to long term impact on the revenue and profitability of this organisation that is going to
take a long time in recovering there low revenue (Humphreys and Munro, 2019). Expensive
nature of raw materials and high regulatory Framework of the UK government towards
conservation of environment has also resulted in more focus towards battery operated vehicle
that is leading to reduction in the overall profit margin.
From the above discussed points there are certain recommendations that are being made for the
purpose of reduction of negative impact on employees on Range rover and its functioning.
Recommendations:
1) Range rover must focus on hybrid vehicles, low cost and green technology that can help this
organization in developing personalized vehicles.
2) Focus on automation Technology where there should be more development of automatic cars
uses of Advanced Technologies.
3) More richer customer experience can be developed by development of self driven autonomous
driving experience of cars.
4) The employees must not suffer from job loss instead they must be given some alternative
employment options or a little cut in their overall pay but in long run they must not suffer
from job loss.
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Conclusion
From the above discussed points, it can be clearly said that brexit has affected UK tour but
there must be efforts made to reduce the negative impacts by taking some preventive measures
such as investment in sectors that are growing because of brexit and cutting down in investment
in such sectors that are declining. The unemployment is a major issue that has to be addressed by
the government of UK and more focus must be made to develop some alternative job
opportunities for people who are facing loss of jobs.
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REFERNCE
Books and Journals
Bailey, D., 2017. Brexit, the UK Auto Industry and Industrial Policy. Regions Magazine, 306(1),
pp.4-5.
Pryce, V., Nielsen, B. and McCabe, S., 2019. Brexit and the Potential Business Impact on
English SMEs'. Brexit Negotiations After Article 50: Assessing Process, Progress and
Impact, p.153.
Humphreys, M. and Munro, D., 2019. Brexit and the Car Industry. Routledge.
Karlsson, J., Melin, H. and Cullinane, K., 2018. The impact of potential Brexit scenarios on
German car exports to the UK: an application of the gravity model. Journal of Shipping
and Trade, 3(1), p.12.
Online
Understanding the economic impact of Brexit ,2018 [Online]. Available Through:
<https://www.instituteforgovernment.org.uk/sites/default/files/Economic%20impact
%20of%20Brexit%20summary.pdf>
BREXIT: IMPACTS ON THE UK AUTOMOTIVE SECTOR, 2017 [Online]. Available
<Through: http://bccg.berlin/bild/webseite/fachartikel_90.pdf>
UK automotive industry feeling the heat of Brexit, 2019, [Online]. Available Through:
<https://www.televisory.com/blogs/-/blogs/uk-s-automotive-industry-feeling-the-heat-of-
brexit>
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