Brexit Is Why GM's German Factory Employees Might Despise The UK

Industry News / 6 Comments

The impact of the vote wasn't just restricted to the British Isles, it seems.

Since the UK's referendum result, there's been a lot of the local coverage on how the vote to leave the EU will affect the British car industry. Peugeot said it may raise prices to counter the pound's devaluation, a drop in new car sales has been attributed to the Brexit vote and Nissan's UK investment plans hinge on the eventual withdrawal terms. Very little is focused on Brexit's impact on the other side of the English Channel - though, as Reuters reports, the referendum's shock-wave isn't just localized to the United Kingdom.

As stated in the article, General Motors has confirmed it will be cutting hours at its German factories in Eisenach and Russelsheim, with the main reason being cited as a reduction in demand for its Corsa supermini and Insignia sedan/wagon models. Though the exact reduction in hours won't be determined until a later date, GM did explicitly state that the size of the cut will "depend heavily on the sales volume of the Insignia and Corsa in the UK". With General Motors already anticipating a drop in revenue in part due to the weaker pound's exchange rates, a drop in demand isn't an ideal situation for GM Europe (which, less we forget, has only on its way to achieve in 2016 its first in-the-black year since 1998).

Of course, it's far too early to say how long this drop in demand will carry on for - especially as car sales in the UK typically slow down in the build up to the license plate format changeover in September. As a result, we'll only know for sure if this anticipated sales drop is limited to the traditionally slow summer sales period when the first '66' plate registration figures are announced in October. Regardless of whether Insignia and Corsa demand picks up after August or not, this case study is a very interesting demonstration of how the result of the EU membership had repercussions outside of the UK - in this instance, stretching all the way from Michigan to the Rhine-Main region.

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