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Brexit Forces Opel To Cut Production Of Second Best Selling Car In Britain: Report

Photo: Vauxhall
Photo: Vauxhall

Opel, sold as Vauxhall in Britain, is slashing production at two of its plants in Germany because nobody in the UK—its biggest market—has any money after that damn Brexit vote, The Financial Times reports.

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We suspected that Opel would pull manufacturing out of the UK after the Brexit vote, but now it looks like it’s pulling back manufacturing in two plants in Germany as well—one in Eisenach and one in Russelsheim. That’s where the Opel Corsa hatchback, the second best selling car in the UK, is built alongside the Insignia sedan.

They’re cutting production because these two cars’ best market is the UK, and following the Brexit vote, the British economy is going down the drain and nobody can afford to buy cars. The Financial Times says analysts predict new car spending will drop 20% if the UK enters a recession, a very real possibility considering Brexit’s already dire economic consequences on Britain.

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Photo: Vauxhall
Photo: Vauxhall

Opel will be reducing labor hours at these two German plants, but told the site the reduction in plant production would “depend heavily on the sales volume of the Insignia and the Corsa in the UK. For both vehicles, the UK is the biggest market.”

They went on, telling the news site:

The Brexit situation is an issue for everybody who does business in and with the UK at the moment and we already announced last month that there will be an impact on our European financial performance if the value of the pound remains at its current level for the rest of the year.

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The Financial Times says multiple carmakers have cautioned their dealers not to expect growth for the rest of 2016 thanks to Brexit. Opel could lose $400 million a year from lost sales and “foreign exchange rate moves” related to the vote, according to the report.

The chances that only Opel will be affected are slim, so which other automakers will be next to scale down plans in Europe?

Sr. Technical Editor, Jalopnik. Always interested in hearing from auto engineers—email me. Cars: Willys CJ-2A ('48), Jeep J10 ('85), Jeep Cherokee ('79, '91, '92, '00), Jeep Grand Cherokee 5spd ('94).

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DISCUSSION

generalpurpose
General Purpose

I watched the friggin polls minute-by-minute, spellbound that the British people could be so ignorant of what they were getting themselves into.

I sincerely hope that it’s not as hard a landing as I’m fearing, and that they will reorient towards Europe in due haste.