Brexit and the Auto Industry: Understanding the Issues for Supply Chain Management

Abstract

This chapter explores the possible future trading options available to the UK and what impacts these trading options will have on the UK automotive industry. The research makes use of a wide range of data to predict the degree of impact each trading alternative will have on the UK automotive industry. Using a Supply Chain Management (SCM) framework, we discuss the trading practices currently in place today in the sector, and its interactions and dependence on privileged access to the Single Market. We then examine likely impacts each potential trading alternative will have on the sector. Drawing on interviews with senior managers in the sector, the findings of the research suggest that all current available trade scenarios put up different types of trade barriers for the sector, potentially increasing costs and decreasing the UK’s attractiveness as a base for automotive manufacturing. The findings also suggest that the uncertainty around the UK’s trading future with EU is deterring investment into the sector, which will likely have consequences further into the future. We conclude by assessing a wide variety of mitigation strategies open to manufacturers, considering their viability and applicability in each potential scenario.

Citation

Li, D., Shishank, S., de Ruyter, A., Ali, S., Bailey, D., Hearne, D. and Salh, S. (2019), "Brexit and the Auto Industry: Understanding the Issues for Supply Chain Management", de Ruyter, A. and Nielsen, B. (Ed.) Brexit Negotiations After Article 50: Assessing Process, Progress and Impact (Brexit Studies Series), Emerald Publishing Limited, Leeds, pp. 173-191. https://doi.org/10.1108/978-1-78769-765-220191010