As the headlines continue to be dominated with speculation about what plan will be put in place as a result of Brexit, the automotive industry is already feeling the impact of uncertainty. Ring explains how it is taking control of its own destiny.
Marketing Manager for Ring, Henry Bisson comments: “As an exporter of thousands of products every year, there was never any doubt that Brexit would have an impact on the business, we just didn’t know exactly what that would look like.
“The effect on currency exchange has already been felt by many with the dollar strengthening against the pound, meaning that the cost of goods has increased with no material price increase. Then there is the euro also gaining strength against the pound. This results in a double impact as we pay more but ultimately sell for less when euros are converted back to pounds.
“The obvious concern is that goods from the UK become consistently higher cost, encouraging customers to go elsewhere. Prices are already rising at the pump as people try to recover the gap caused by buying in dollars. This means logistics and distribution costs are rising, so eventually prices for aftermarket products will too.
“Conversely, in Europe, volume sales are rising as they benefit from the increase in the value of the euro against the pound. It can be argued that this does bridge the gap short-term but we have to consider the longer-term impact of Brexit.”
Working with distributors and retailers across Europe, Ring has remained close to contacts since the European referendum to monitor the changing reaction as Brexit talks begin.
Bisson continues: “Following the initial announcement, and the headlines that ‘vote out’ created, contacts have become cautious. They, like us, are waiting to find out exactly what happens now. In the short-term it’s business as usual but how long this continues is unpredictable.
Having such a strong network across Europe has given Ring a greater insight into the reaction of those it works with and has therefore also given the business a chance to step back and consider what its own response will be.
Bisson continues: “Predictions and speculation are exactly that. Until we get a roadmap that has the facts the industry will find it difficult to plan and that is why we have chosen to take control. We need to be ahead of the game and we intend to secure our business across Europe.
“We’ve worked hard to establish the Ring brand across Europe over the last 10-years and have a strategy in place to ensure that this will continue. Business across Europe has reported growth year-on-year as we offer an alternative to the traditional markets. In order for us to build on this success, and to reinforce our intentions and commitment to Europe, we will be investing in these markets.
“Far from waiting to see what happens, we are budgeting to invest in Europe and very much see the markets as an opportunity for further and future growth.”
In the wider automotive market, with more than 30 million cars on the roads in the UK, the industry is not going to disappear overnight. However, as an industry that relies heavily on export, predictions may signal the end for some foreign businesses that could simply feel it is too expensive to produce in the UK.
Bisson concludes: “We can only predict what foreign owners will do and use past experience to influence this. We are hopeful that production will not be moved from the UK, which would result in the loss of skills and jobs.
“That is why we are choosing to take a more pragmatic approach to Brexit. We can’t change it but we can plan for change and use this as an opportunity to strengthen the business in what will inevitably become an increasingly competitive and turbulent marketplace.”