-
Brexit meltdown? UK car investment tumbles but consumers resilient

Car makers see no deal as the worst possible option, the country’s leading automotive lobby group said, while in the wider manufacturing segment a survey from the Confederation of British Industry said optimism among smaller British companies had tumbled to a three-year low in July.
Yet an indicator of consumer confidence from market researcher GfK rose unexpectedly in July, while top executives from fashion retailer Next (NXT.L) and banking group Lloyds (LLOY.L) both said they had seen no negative Brexit impact on consumers so far.
Britain’s new prime minister Boris Johnson has repeatedly cautioned that if the EU refuses to renegotiate the Brexit divorce deal agreed by his predecessor Theresa May he will lead Britain out on Oct. 31 without a deal.
Sterling has fallen more than three cents since Johnson was named as prime minister just over a week ago. Many investors say a no-deal Brexit would send shock waves through the world economy and tip Britain’s economy into a recession.
In an indication of the hit from more than three years of Brexit-related political crisis, investment in Britain’s car sector fell more than 70 percent in the first half of the year, the Society of Motor Manufacturers and Traders (SMMT) said.
“The fear of no-deal is causing investors to sit on their hands,” said Chief Executive Mike Hawes. “The worst outcome would be no-deal. That’s what they fear, that is why they’re not investing.”
Britain’s overwhelmingly foreign-owned car industry was rebuilt from the 1980s by the likes of Japan’s Nissan (7201.T), Toyota (7203.T) and Honda (7267.T), which were encouraged by former Prime Minister Margaret Thatcher to use the country as a launch pad into Europe.
The SMMT said investment had fallen to 90 million pounds ($110 million) in the first half of 2019, against 347.3 million in the same period in 2018 and 647.4 million a year before.
POSSIBLE DELAYS
Car makers have also spent at least 330 million pounds on Brexit contingencies such as securing warehousing space and stockpiling parts in order to mitigate the impact of possible delays to the movement of models and components at ports.
Supporters of a decisive Brexit say that while there could be some short-term difficulties, the disruption of a no-deal Brexit has been overplayed and that in the long term the United Kingdom would thrive if it left the EU.
Leaving the EU was once far-fetched: Just two decades ago, British leaders were arguing about when to join the euro. Now, British government policy is to leave, “do or die” in Johnson’s words, on Oct. 31.
If it leaves without a deal, Britain would quit the EU’s 500 million-strong single market and customs union overnight, falling back on World Trade Organisation rules that could mean many import and export tariffs. There would be no transition.
Three years of political squabbling over Brexit has left allies and investors puzzled by a country that for decades seemed a confident pillar of Western economic and political stability.
That has made investment in the United Kingdom a hard sell in boardrooms from Tokyo to New York.
Still, full-year auto investment, based on new publicly announced decisions on fresh spending, will be boosted by a roughly 1 billion pound move by Jaguar Land Rover (part of Tata Motors (TAMO.NS)) to make electric cars in Britain.
And the British consumer is relatively buoyant, according to Next, whose CEO Simon Wolfson said he had seen no evidence of spending being hit by worries over Brexit.
“The encouraging thing is the government is now seriously preparing for no deal,” Wolfson, a Conservative member of Britain’s upper house of parliament, told Reuters.
“If the country is well prepared and we still have free flow of goods through our ports ... then I can’t see any reason why there should be any major impact on the consumer,” Wolfson said.
Banking group Lloyds (LLOY.L) also said it had seen little impact on consumers so far.
GfK’s indicator of consumer confidence rose unexpectedly in July to -11 from -13 in June, beating forecasts in a Reuters poll but broadly in line with its range this year.
“Consumers have generally been less affected by Brexit uncertainties than business,” GfK executive Joe Staton said. “However, the coming months to the Oct. 31 departure date will test the strength of this confidence.”
Tags
You May Also Like
Popular Posts
Caricature
BENEFIT AGM approves 10%...
- March 27, 2025
BENEFIT, the Kingdom’s innovator and leading company in Fintech and electronic financial transactions service, held its Annual General Meeting (AGM) at the company’s headquarters in the Seef District.
During the meeting, shareholders approved all items listed on the agenda, including the ratification of the minutes of the previous AGM held on 26 March 2024. The session reviewed and approved the Board’s Annual Report on the company’s activities and financial performance for the fiscal year ended 31 December 2024, and the shareholders expressed their satisfaction with the company’s operational and financial results during the reporting period.
The meeting also reviewed the Independent External Auditor’s Report on the company’s consolidated financial statements for the year ended 31 December 2024. Subsequently, the shareholders approved the audited financial statements for the fiscal year. Based on the Board’s recommendation, the shareholders approved the distribution of a cash dividend equivalent to 10% of the paid-up share capital.
Furthermore, the shareholders endorsed the allocation of a total amount of BD 172,500 as remuneration to the members of the Board for the year ended 31 December 2024, subject to prior clearance by related authorities.
The extension of the current composition of the Board was approved, which includes ten members and one CBB observer, for a further six-month term, expiring in September 2025, pending no objection from the CBB.
The meeting reviewed and approved the Corporate Governance Report for 2024, which affirmed the company’s full compliance with the corporate governance directives issued by the CBB and other applicable regulatory frameworks. The AGM absolved the Board Members of liability for any of their actions during the year ending on 31st December 2024, in accordance with the Commercial Companies Law.
In alignment with regulatory requirements, the session approved the reappointment of Ernst & Young (EY) as the company’s External Auditors for the fiscal year 2025, covering both the parent company and its subsidiaries—Sinnad and Bahrain FinTech Bay. The Board was authorised to determine the external auditors’ professional fees, subject to approval from the CBB, and the meeting concluded with a discussion of any additional issues as per Article (207) of the Commercial Companies Law.
Speaking on the company’s performance, Mr. Mohamed Al Bastaki, Chairman BENEFIT , stated: “In terms of the financial results for 2024, I am pleased to say that the year gone by has also been proved to be a success in delivering tangible results. Growth rate for 2024 was 19 per cent. Revenue for the year was BD 17 M (US$ 45.3 Million) and net profit was 2 Million ($ 5.3 Million).
Mr. Al Bastaki also announced that the Board had formally adopted a new three-year strategic roadmap to commence in 2025. The strategy encompasses a phased international expansion, optimisation of internal operations, enhanced revenue diversification, long-term sustainability initiatives, and the advancement of innovation and digital transformation initiatives across all service lines.
“I extend my sincere appreciation to the CBB for its continued support of BENEFIT and its pivotal role in fostering a stable and progressive regulatory environment for the Kingdom’s banking and financial sector—an environment that has significantly reinforced Bahrain’s standing as a leading financial hub in the region,” said Mr. Al Bastaki. “I would also like to thank our partner banks and valued customers for their trust, and our shareholders for their ongoing encouragement. The achievements of 2024 set a strong precedent, and I am confident they will serve as a foundation for yet another successful and impactful year ahead.”
Chief Executive of BENEFIT; Mr. Abdulwahed AlJanahi commented, “The year 2024 represented another pivotal chapter in BENEFIT ’s evolution. We achieved substantial progress in advancing our digital strategy across multiple sectors, while reinforcing our long-term commitment to the development of Bahrain’s financial services and payments landscape. Throughout the year, we remained firmly aligned with our objective of delivering measurable value to our shareholders, strategic partners, and customers. At the same time, we continued to play an active role in enabling Bahrain’s digital economy by introducing innovative solutions and service enhancements that directly address market needs and future opportunities.”
Mr. AlJanahi affirmed that BENEFIT has successfully developed a robust and well-integrated payment network that connects individuals and businesses across Bahrain, accelerating the adoption of emerging technologies in the banking and financial services sector and reinforcing Bahrain’s position as a growing fintech hub, and added, “Our achievements of the past year reflect a long-term vision to establish a resilient electronic payment infrastructure that supports the Kingdom’s digital economy. Key developments in 2024 included the implementation of central authentication for open banking via BENEFIT Pay”
Mr. AlJanahi concluded by thanking the Board for its strategic direction, the company’s staff for their continued dedication, and the Central Bank of Bahrain, member banks, and shareholders for their valuable partnership and confidence in the company’s long-term vision.
opinion
Report
ads
Newsletter
Subscribe to our mailing list to get the new updates!