The Financial Times (paywall) says: “Ford is considering closing plants in the UK and across Europe in response to Britain’s vote to leave the EU, as it forecast a $1 hit to its business over the next two years.”
The price of cars in the UK will also rise before the end of this year, according to Ford.
One of the problems is the fall in the value of the pound which will increase the price of imported cars. Ford now has two factories in the UK, at Dagenham and Bridgend which makes engines which are exported to European assembly plants. Complete cars, including the British made engines, are then imported into the UK.
Manufacturers like Ford have very complex supply chains which move components around European single market freely without restrictions. The possibility that the UK would be outside this market is naturally spooking businesses like car makers whose manufacturing strategies are based on the free movement of goods.
Other car makers are likely follow Ford when it raises prices. General Motors which owns Vauxhall has said the fallout from the referendum vote would cost it $400m this year.
The FT says:
Questions have been raised over the prospects for the UK’s car industry in the wake of the Brexit ballot, with analysts questioning whether the plants can win fresh work during a period of uncertainty over trade and the country’s position in the single European market.