As the UK and the rest of the world settle down post-Brexit, the challenge to smooth relationships between Europe and the UK is just beginning.
In the shipping industry there are a number of hurdles to overcome and the dust on leaving the EU will take time to settle. One of the key trades that may be affected is between the UK and Germany and the potential significant impact on the automotive industry.
Automotive Logistics – facts & figures
The major player in the EU market is, of course, Germany. In 2013 the UK imported £56 billion of goods and services from Germany and £38 billion from China, showing the high level of trade we enjoy with our European partner. Furthermore, according to the Society of Motor Manufacturers & Traders, of the 2.2 million cars registered in the UK in 2013, 39 per cent of these originated in Germany. It’s not uncommon for the German market to have a huge influence on our motor trade. As you drive around, you will see that the majority of cars on the UK roads today originate from Germany and it’s interesting to reflect how the wider automotive logistics industry might be affected.
Automotive Logistics at John Good Shipping
John Good Shipping has seen the automotive industry grow in recent years due to an increase in volume arriving from Turkey and South America. Whilst these are predominantly automotive component parts, it demonstrates a growing trend that manufacturing and assembly are taking place inside Europe.
In terms of volume, the first six months of 2016 has seen us handle around 2,000 TEU and approximately 3,000 cubic metres of consol cargo. Within this, we have found that the majority of components being imported are clutch assemblies, brake discs, brake pads, flywheels, suspension components and wiper blades.
The information we are receiving from UK importers is that they are sourcing more and more motor vehicle spares from Turkey rather than China due to a better product, better price and shorter transit times.
What does the future hold for Automotive Logistics in the UK ?
There is no doubt that the uncertainty of Brexit could have some implications on the future of the shipping industry. Some of Europe’s top manufacturers saw share prices take a hit following the result, however some are now seeing these edging back to pre-Brexit levels. However, with around 85% of new vehicle sales in the UK being imported, there could be some more far-reaching implications ahead. Although vehicle exports are currently experiencing record levels, 50-60%* of component parts are imported which could ultimately lead to disruptions in the supply chain.
For the time being it seems as though there won’t be a major change in the automotive logistics sector in the short-term, however time will tell what the future holds for the UK and its role in this key industry sector.
Discover more about our Automotive Logistics services.