Effects of the COVID-19 Pandemic & BREXIT on the UK Automotive Industry
The Automotive Industry is usually one the first to be impacted when a global crisis strikes, whether it be the OPEC fuel crisis of the early 70’s, the economic crash of the late 80’s or in more recent events the financial crash of 2008 and now the Virus Pandemic; the potential effects of which are discussed in my short article.
It is therefore apparent that with a good economy and low unemployment figures the general assumption is that peoples basic needs for survival are met and that they are aspiring to material gains such as property, fashion and cars. The resulting factor of both good and bad economic scenarios is that the automotive industry reacts with their product offerings. Take the excess of the early to mid-eighties for example, with American and German luxo-barges with VHS players and in-car phones, now compare that to the post Black Monday frugality of 90’s, with econoboxes lashed in grey plastic interiors and economy being all the marketing rage.
Maybe we as an industry are wiser to such events nowadays with platform flexibility driven by competition and cost saving targets. Multi-function platforms such as VW groups MQB and resulting competitor platforms allow a company to design and build vehicles of all shapes and sizes without the need to redesign from the ground up. Another factor which may have lent itself in our favour is the continual improvement of our engine technology and a deeper relationship with competitors where alliances have formed to keep up with tight emission regulations and shared cost of development. These two key drivers may have reduced the need for the automotive industry to react in a way which was previously required.
That being said, it has been clearly highlighted during this pandemic that western manufacturers are heavily reliant on Chinese suppliers – this not being an issue until it’s an issue, reminiscent of the industries reliance on OPEC controlled oil in the 70’s. Talking about the UK exclusively for a moment, manufacturing jobs have been making themselves scarce since the 70’s with greater financial incentives for companies to be had with manufacturing in the far east and China. While this has been great for a global economy and prosperity for all, it has over the last 3 decades made the UK heavily reliant on those foreign channels for supplies as well as skilled workers. The impact of the pandemic on the industry therefore may not be as we expect, it may be a more fundamental shift towards local production for local consumption and not directly reflected in the cars that we drive, for the time being at least.
With regards to automotive design, we have already seen reduced capacity in clay and full-size assets, due to the availability and improvement of VR and digital reviews as well as the astronomical cost of shipping and complications around logistics. Especially true for brands with studios across various countries. Flexibility of working from home (WFH) has allowed us to continue operating our studios and while the technology was always there, we never felt the need to utilise it. Its possible that post pandemic the upward trend to WFH may continue and automotive design studios may recirculate and invest the cash saved in bricks mortar and utilities into tech and future programs.
In closing, we may be moving towards sustainable industrialisation, not only producing and driving EV's & PHEV's but re-striking the rulebook to ensure the production process is as sustainable as possible. Alongside this we may see manufacturing of various goods and tech return to our shores and with it skilled jobs and greater opportunities for the next generation of designers, modellers, engineers and so fourth. If some of this does come to happen, how might the vehicles we drive change? By the way these are just my thoughts based on the trends and how things seem to be unfolding, feel free to share your thoughts so that together we can make one another more informed about these uncertain times.
