The economic consequences of Brexit
Poll: The economic consequences of Brexit
Total Members Polled: 732
Discussion
London424 said:
Isn't that a a classic example of looking at percentages rather than numbers?
As in 5% of VW might be 50,000 vehicles, whereas 50% of JLR is 2,000 vehicles. So JLR need to try and convince the 50,000 potential VW buyers into a JLR. As long as they can find 2,000 of them they are in the same position as they were.
My point is that VW won't be whinging to Merkel anywhere near as much as JLR will be to May because the UK just doesn't matter to them as much as the EU does to JLR.As in 5% of VW might be 50,000 vehicles, whereas 50% of JLR is 2,000 vehicles. So JLR need to try and convince the 50,000 potential VW buyers into a JLR. As long as they can find 2,000 of them they are in the same position as they were.
Hence percentage is what is important.
Let's flip it to make it more obvious.
The UK decides to put a 10% tariff on any flights from Ireland.
Ireland responds in kind.
It matters a lot to Ryanair and Aer Lingus but BA doesn't really care that much.
walm said:
My point is that VW won't be whinging to Merkel anywhere near as much as JLR will be to May because the UK just doesn't matter to them as much as the EU does to JLR.
Hence percentage is what is important.
.
Think we are the German car industry largest export market so not entirely sure they are going to be as indifferent as you make out. Hence percentage is what is important.
.
https://global.handelsblatt.com/edition/456/ressor...
810,000 cars a year are big numbers even for an industry as successful as the German car industry
Edited by JagLover on Thursday 29th September 10:46
walm said:
London424 said:
Isn't that a a classic example of looking at percentages rather than numbers?
As in 5% of VW might be 50,000 vehicles, whereas 50% of JLR is 2,000 vehicles. So JLR need to try and convince the 50,000 potential VW buyers into a JLR. As long as they can find 2,000 of them they are in the same position as they were.
My point is that VW won't be whinging to Merkel anywhere near as much as JLR will be to May because the UK just doesn't matter to them as much as the EU does to JLR.As in 5% of VW might be 50,000 vehicles, whereas 50% of JLR is 2,000 vehicles. So JLR need to try and convince the 50,000 potential VW buyers into a JLR. As long as they can find 2,000 of them they are in the same position as they were.
Hence percentage is what is important.
Let's flip it to make it more obvious.
The UK decides to put a 10% tariff on any flights from Ireland.
Ireland responds in kind.
It matters a lot to Ryanair and Aer Lingus but BA doesn't really care that much.
walm said:
London424 said:
Isn't that a a classic example of looking at percentages rather than numbers?
As in 5% of VW might be 50,000 vehicles, whereas 50% of JLR is 2,000 vehicles. So JLR need to try and convince the 50,000 potential VW buyers into a JLR. As long as they can find 2,000 of them they are in the same position as they were.
My point is that VW won't be whinging to Merkel anywhere near as much as JLR will be to May because the UK just doesn't matter to them as much as the EU does to JLR.As in 5% of VW might be 50,000 vehicles, whereas 50% of JLR is 2,000 vehicles. So JLR need to try and convince the 50,000 potential VW buyers into a JLR. As long as they can find 2,000 of them they are in the same position as they were.
Hence percentage is what is important.
Let's flip it to make it more obvious.
The UK decides to put a 10% tariff on any flights from Ireland.
Ireland responds in kind.
It matters a lot to Ryanair and Aer Lingus but BA doesn't really care that much.
They sold 1 million units across the EU (the numbers are approx. I do have them but not to hand) - of which Germany were 260,000 and the UK 240,000. France/Spain/Italy were 170,000 units combined.
So for EU sales approx. 24% of BMW sales come to the UK. Ok not global - but they seem to announce results regionally. In 2015 BMW had 12% growth in the UK. You would think as a business that is a big risk....maybe not in global % terms, but the UK is also BMW's 4th biggest global market after USA/China/Germany. I think the %'s are pretty high as a proportion of business, but I agree less than % of EU export business for say Jag.
sanf said:
Don't under estimate the UK, the size of the economy and the people's resilience....we are asking, infact expecting a lot from the Brexit team, so they better deliver. I just hope they do.
Indeed.The UK population is 13% of the EU. Bigger than 15 other EU Members combined.
The UK GDP is 16% of the EU GDP. Bigger than 19 other EU Members combined.
This is a heck of a loss to the EU when it is trying to arrange trade deals with ROW.
walm said:
I think that is the wrong way round.
I don't know the numbers but it seems likely to me that the % of cars made in the UK and exported to the EU will be far higher than the % made in say Germany and imported here.
So JLR might well see what up to 50% of their volumes under the threat of a 10% tariff on arrival in the EU for sale.
Which would be a disaster.
Whereas for VW, who send perhaps 5% of their cars to the UK, it's no big deal.
Sure they would rather the status quo with no tariffs but they won't be shutting down entire plants just because a tiny end market (for them) sees a slight drop in demand.
Hence JLR has far more to lose than VW from a mutually imposed 10% tariff (as per WTO rules), no?
20% of cars made in Germany are exported to the UK.I don't know the numbers but it seems likely to me that the % of cars made in the UK and exported to the EU will be far higher than the % made in say Germany and imported here.
So JLR might well see what up to 50% of their volumes under the threat of a 10% tariff on arrival in the EU for sale.
Which would be a disaster.
Whereas for VW, who send perhaps 5% of their cars to the UK, it's no big deal.
Sure they would rather the status quo with no tariffs but they won't be shutting down entire plants just because a tiny end market (for them) sees a slight drop in demand.
Hence JLR has far more to lose than VW from a mutually imposed 10% tariff (as per WTO rules), no?
sanf said:
I think the %'s are pretty high as a proportion of business, but I agree less than % of EU export business for say Jag.
That's all I am saying.It matters more to Jag than it does to VW.
Which is the opposite of this point:
Andy Zarse said:
All I know is that if the UK industry players are making such pleas to Mrs May then just imagine the ear-bending Merkel is getting from her industry heavyweights.
Of course it's a huge deal for both of them!I never remotely meant to suggest VW would be indifferent. They care very much!
walm said:
Andy Zarse said:
All I know is that if the UK industry players are making such pleas to Mrs May then just imagine the ear-bending Merkel is getting from her industry heavyweights.
I think that is the wrong way round.I don't know the numbers but it seems likely to me that the % of cars made in the UK and exported to the EU will be far higher than the % made in say Germany and imported here.
So JLR might well see what up to 50% of their volumes under the threat of a 10% tariff on arrival in the EU for sale.
Which would be a disaster.
Whereas for VW, who send perhaps 5% of their cars to the UK, it's no big deal.
Sure they would rather the status quo with no tariffs but they won't be shutting down entire plants just because a tiny end market (for them) sees a slight drop in demand.
Hence JLR has far more to lose than VW from a mutually imposed 10% tariff (as per WTO rules), no?
walm said:
Andy Zarse said:
What an extraordinary, convoluted and, if I may add, in my opinion completely incorrect analysis.
So you think UK sales matter more to VW than EU sales matter to JLR?walm said:
Andy Zarse said:
What an extraordinary, convoluted and, if I may add, in my opinion completely incorrect analysis.
So you think UK sales matter more to VW than EU sales matter to JLR?So for example if a tariff led to a 10% drop in exports to the EU, it would amount to a 2% drop in total sales. Not the armageddon presented.
paulrockliffe said:
walm said:
Andy Zarse said:
What an extraordinary, convoluted and, if I may add, in my opinion completely incorrect analysis.
So you think UK sales matter more to VW than EU sales matter to JLR?So for example if a tariff led to a 10% drop in exports to the EU, it would amount to a 2% drop in total sales. Not the armageddon presented.
Andy seems to be confused between MORE people caring and HOW MUCH each person cares.
paulrockliffe said:
Why don't you look at the actual figures? Last time they were mentioned the figure quoted for JLR included as sales to the EU sales within the UK (It's in the EU!) but also sales to the rest of Europe. Sales to EU countries that are not the UK is around 20%. It's a tiny bit more than sales to the US and also a tiny bit more than sales to China. 25% are sold in the UK and 15% to the rest of the world.
So for example if a tariff led to a 10% drop in exports to the EU, it would amount to a 2% drop in total sales. Not the armageddon presented.
http://www.independent.co.uk/news/business/news/brexit-latest-tariffs-on-uk-car-exports-to-europe-would-be-disastrous-for-jobs-says-jaguar-land-a7334991.htmlSo for example if a tariff led to a 10% drop in exports to the EU, it would amount to a 2% drop in total sales. Not the armageddon presented.
Perhaps you should give Hanno Kirner a ring and tell him the good news, he seems to think that tariffs would be 'disastrous' for UK jobs, but what does he know...
Andy Zarse said:
walm said:
Well if you gave us the figures for VW then we would know who cares more.
Andy seems to be confused between MORE people caring and HOW MUCH each person cares.
Quite the opposite. Still, what I do know is money talks. You know what the other stuff does...Andy seems to be confused between MORE people caring and HOW MUCH each person cares.
But once again looking at it from your original perspective of the "industry heavyweights" I still think they are in a FAR better position to cope than say JLR.
It just seems vanishingly unlikely that BMW (25% of volumes into UK - some of which are MINIs and made here so avoid any tariff problems) would say "listen Angela, with a 10% tariff we will be forced to build a huge factory in the UK to build our entire line-up of RHD cars and shut down a bunch of German capacity to offset.
That is a laughable suggestion.
They might re-tool the MINI plant in Cowley to do some 3-series perhaps since it is such a big volume car for them.
But a brand new massive factory to cover the full range?
I can't see the economics stacking up.
Volume is crucial.
It would make them more money just to take the 10% tariff hit and sell a few less cars in the UK than spend all that capex on a small volume facility here.
But that is EXACTLY what JLR will do.
They will ramp up Slovakian capacity and drop Solihull capacity in order to avoid the tariff.
BECAUSE THEY ALREADY HAVE THE FACTORY!
Likewise for Nissan.
They have factories in the EU.
So they can just shift capacity to avoid tariffs. Which means lost UK jobs.
Sure it will cost them more than it does now but unlikely it will be 10% more (labour just isn't that significant a part of COGS for auto OEMs).
"Germany Realises They’re Going to Be EU’s ATM"
http://order-order.com/2016/09/29/germany-realises...
http://order-order.com/2016/09/29/germany-realises...
chris watton said:
"Germany Realises They’re Going to Be EU’s ATM"
http://order-order.com/2016/09/29/germany-realises...
World domination don't come cheap you know http://order-order.com/2016/09/29/germany-realises...
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