July - August 2016

Brexit: Does it affect Britain's car industry?

First of all, let me take this opportunity to wish you all a "Happy Eid" and "Fitr Majid"!

The summer has already started on the 21st of June, and most of you know quite well that July-August is somehow a low season in terms of car launches, motor shows and the media industry in general. But it seems that I've got a nice story to tackle for my letter: Brexit. What is Brexit (Britain and exit)? It was the talk of the town for the past weeks. In the end nearly 52 percent of 33 million voters on the referendum decided they want the UK to leave the EU; and already, lots of issues have been raised.

What is the effect of UK's exiting the EU on the car industry?
Well, the British automotive industry is one of the first to feel the consequences of this result, and what happens next could affect both the country's economy as well as the future of almost 800,000 people employed by the wider industry in their UK plants. When the question of the referendum was first raised earlier this year, the Society of Motor Manufacturers & Traders (SMMT), which denotes all major auto manufacturers, spoke out in favor of remaining in the EU, quite obviously.

The message from UK automotive is clear: "Being in Europe is vital for the future of this industry and to secure jobs, investment and growth," SMMT CEO Mike Hawes said at the time. "UK automotive is flourishing, with record car exports, new registrations and the highest manufacturing levels for a decade. Our members have stated that pulling out of Europe could jeopardize this."

A flashback to last year in 2015, a record 1.5 million cars were produced in the UK and 57 percent of them were exported to EU countries. Being a member of the Union means that there are no tariffs, while countries also share the same product standards. But, if Britain were to leave this would change, as new trade agreements and regulations would have to be agreed upon between the two parties. The situation gets even more complex as all major manufacturers are either owned by or are local subsidiaries of foreigners, the vast majority of them Asian and saw their stock drop substantially after the referendum outcome. Toyota has been there for half a century; Nissan employs 8,000 people and is the largest, with 475,000 cars made last year, of which a staggering 80 percent were exported to the EU.

CEO Carlos Ghosn had previously stated that in the case of a Brexit, production at its Sunderland plant would be "examined on a case-by-case basis", a sentiment echoed by Toyota, Honda, Ford, General Motors, the VW Group and Jaguar Land Rover, none of whom wants to operate in an uncertain environment.

British Prime Minister, David Cameron, might have resigned, yet even if this decision was to be authorized, it would take at least two years before it comes into effect, maybe even more. That's mainly the case for the time being.

In this issue quite exciting drives await you, like the first drive of the Jaguar F-Pace, Bentley Bentayga, Fiat Tipo, Fiat Fullback and Nissan Altima. These first drives were accompanied by some editors' choice test drives, such as the Cadillac ATS Coupe, Nissan Maxima, Volvo XC90 and Mercedes GLC250. Our team also did a trip from Dubai to Muscat on board the LR Discovery Sport.

I leave you here; it's going to be a bit longer than usual because our next issue is in September. Enjoy your summer, drink lots of water and keep following us on our social media platforms…

- Issam Eid, Editor-in-Chief

Cover Story: Jaguar F-Pace



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