As the Government of the United Kingdom fast approaches
a crucial stage of the Brexit negotiations, ESCP Europe's London Campus
proudly supports the Brexit Forum Series - an exclusive
member-to-member event organised by the French Chamber of Commerce
in Great Britain (FCCGB).
Taking place in London at the FCCGB premises, the Brexit debates
provide advice and best practice guidance for Franco-British
businesses. These timely discussions have helped attendees to
assess the latest developments and strategies around this crucial
topic and to benefit from regulatory input. The forum is aimed at
Heads of Brexit Task Forces, Heads of Strategy, Heads of Corporate
Affairs in charge of Brexit and others with associated duties.
In its most recent discussion on 11th April 2018, the
Brexit Forum brought together international organisations and
business representatives from the automotive, construction,
banking, legal, and energy industries to discuss the impact of
Brexit on investment decisions in the automotive industry.
Participants looked at questions of Brexit on the investments and
regulatory frameworks for businesses in an era of post-UK EU
Companies attending included:
EDF Energy, PwC, AutoAnalysis, Groupe Renault UK & Ireland, Atout France Tourism Development Agency, ESCP Europe, London & Partners, European Bank for
Reconstruction and Development (EBRD), Sherrards Solicitors LLP, Embassy of France in the UK, Société Générale, Veolia, Region Hauts de France, Department for Exiting the European Union, Orange Brand Services Limited, VINCI Construction Grands Projets British
Robotics, Reed Smith
Mitchell LLP, Cripps LLP, Deloitte LLP, EY, CBRE Ltd, ebl miller
rosenfalck, Council of British Chambers of Commerce in Europe
(COBCOE) and many others.
Forum Co-chairs Angela Hepworth (Corporate Policy and
Regulation Director at EDF Energy) and Neil Sherlock (Partner, Corporate Affairs at
PwC) were joined by industry expert
Ian Henry (Director of AutoAnalysis).
What does the future hold?
ESCP Europe's Affiliate Professor Jeremy Baker reports:
Brexit could have a dramatic effect on the British automotive
industry. The suggestion has been that, if the UK government does
not achieve a favourable agreement with the EU, then car manufacturing operations could be
shifted to regions such as Eastern Europe.
Ian Henry, auto-industry expert,
explained that the automotive industry has a very
complex structure. Therefore moving operations abroad, away from
the UK, would require extensive planning, massive investment
(>GBP £2 billion for a new factory), and would disrupt existing
robust supply chain processes.
Two key factors mean that the automotive industry operates in a
- The car industry works on a long-term basis
- It's a Europe-wide industry
Assembling a car is such a complex process - to establish a new
assembly plant or launch a model or introduce a new platform is
challenging and requires long-term timing. The industry expects a
model to last for 7 years. A new car factory might take 4 years to
plan, and must produce for at least 2 model cycles in order to pay
back the investment, i.e. the factory must be in production for 7 +
The current automotive industry in the UK is highly integrated
with the rest of Europe. At present, there are 1.7 million
cars assembled in Britain. However, it is essential to consider
that these British cars may not count as British according to WTO
rules as their British components only account for around 40%
sourced from Britain. Currently, most British automobiles have over
70% of European content (including UK content) and the UK is the
fourth largest car producer in Europe.
The automotive industry in the UK in a Post - Brexit
What are the potential outcomes?
- Soft Brexit scenario: There will be no need to
shift operations from a British factory to a continental plant, the
key players in the industry allocated their production to specific
factories in UK years ago and operations will continue with minimum
- Hard Brexit scenario: This could increase the
pressure to expand the British car component sector so that British
cars had the chance of achieving 60% of UK content to comply with
- Hard Brexit and the British component
industry: It would be challenging to enlarge the British
component sector quickly, the expansion would require significant
investment taking place over many years. Also this industry will
very likely face a shortage of highly - skilled workers.
- Hard Brexit and the consumers: This could
increase significantly the cost of making cars in the UK.
According to this analysis of the automotive industry, hard
Brexit is not an attractive option. The UK Government, EU
country members and key players in the industry must compromise and
achieve a Soft-Brexit agreement. They must face facts - assembly
plants can't be moved, component suppliers can't be suddenly moved
to the UK, and from a UK economic perspective, car manufacturing
jobs cannot be suddenly taken away from UK without causing
significant regional harm.
Upcoming Brexit Forum
The next Forum will take place on 13th
June, the topic is "Impact of BREXIT on
HR & Education (talent, labour law, mobility, and training).
Speakers to be announced soon. Stay tuned!
How to attend
Attendance is by invitation only. Register your interest with Ophélie Martinel.
About the French Chamber of Commerce in Great Britain
Established in 1883, the Chamber is part of a network of 120
French Chambers of Commerce Abroad (CCI France International) and
is one of the top French Chambers worldwide. Their main aims are to
provide a platform for exchange and networking at the service of
Franco-British firms in the UK, to promote their members' interests
to key decision makers and to help develop economic and commercial
relations between France and the UK. The size of their network and
its diversity - 600 members ranging from Start-up & SMEs to
blue-chip companies, with 40% non-French representatives -
contribute significantly to their reputation and success. Their
Company Set up, Business Centre and Recruitment services provide
both British and French companies with a large range of bespoke
professional services. The 100 events they organise every year,
with personalities from the British and French political, academic
and business worlds, offer great opportunities for their members to
expand their network of contacts and develop their business.
More information: www.frenchchamber.co.uk
About ESCP Europe
Established in 1819, ESCP Europe has educated generations of
leaders and entrepreneurs. With its six urban campuses in Berlin,
London, Madrid, Paris, Turin and Warsaw, ESCP Europe's true
European identity enables the provision of a unique style of
cross-cultural business education and a global perspective on
international management issues. The School welcomes 4,600 students
and 5,000 executives from 102 different nations every year,
offering them a wide range of general management and specialised
programmes (Bachelor, Masters, MBA, Executive MBA, PhD and
More information: www.escpeurope.eu