Car dealers in the U.K. continue to conduct their business under the umbrella of Brexit uncertainty — at least for now, as political, economic, social, legislative, and environmental issues impact the new passenger vehicle registrations market, according to Research and Markets.
The issue of Brexit itself came about in 2016, and for years the lack of a clear strategy to leave the U.K. with a deal has dealt more negative than positive impacts on the country.
In a news release, Research and Markets said the country is “showing increasing signs of economic weakness and potential recession, with productivity falling, external investment drying up, business and consumer confidence in decline, and the Pound – since the Brexit referendum — falling over 10 per cent in value against the Euro.”
On the environmental and social front, the industry is also dealing with the EU’s new Worldwide Harmonized Light Vehicle Testing Procedure (WLTP), which is already in effect, and Regulation (EC) 443/2009, which will come into force in 2021. These legislations are meant to reduce the environmental impact of vehicles in the EU through more accurate testing and tougher emissions constraints. The change has and continues to impact OEMs and car dealers in the U.K.
“As a result of this disruption, the registration of new passenger vehicles in the United Kingdom has been in decline since 2016 and is calculated at 2,306,000 vehicles in 2018,” said Research and Markets. “With a best-case view on the economic development of the U.K., this figure is forecast to continue contraction at a rate of -1.2 per cent CAGR, resulting in 2,270,000 registrations in 2020.”
However, the company also anticipates that the U.K. market will return to growth — and here’s why: the country is showing signs of recovery from Brexit. OEM product portfolios are also being updated to comply with the new legislations, “growing slowly by 1.8 per cent CAGR from 2020 to reach approximately 2,390,000 registrations by 2023,” said Research and Markets.
British Prime Minister Boris Johnson’s “do or die” strategy of crashing out of the EU with or without a deal if off the table; he had to request an extension from the EU, which offered a new deadline of January 31 — a deadline that has been accepted by Johnson, according to the BBC.
