The recent decision of the United Kingdom to abandon the European Union, makes analysts forecast that automakers' profits will drop by billions of dollars and new-vehicle sales will be cut by nearly a million units over the next three years.
After the results of the historic vote were announced the shares of suppliers and dealership groups with significant exposure to the U.K., as well as Fiat Chrysler Automobiles became particularly vulnerable. The U.K. auto market has surged in recent years to hit a record high of 2.6 million cars in 2015. Ninety percent of those vehicles are imported, mostly from other parts of Europe. It built 1.6 million vehicles last year, exporting 80 percent of them.
It should also be taken into consideration that the U.K. is the third-largest market globally for Ford Motor Co. and fourth-largest for General Motors. Ford ended its streak of losses in Europe last year, and GM is targeting its first European profit in 15 years. Maintaining a stable trading environment in the U.K. is a priority for all large Motor Manufacturers. Specialists have already calculated that PSA Peugeot-Citroen, VW and Ford would be hardest hit by the status changes of the U.K.