Brexit could be ‘opportunity’ for Vauxhall

Britain’s exit from the European Union could be an “opportunity” for Vauxhall to grow, despite the challenges it presents, according to PSA Group chairman Carlos Tavares.

The threat of a no-deal Brexit has been a major concern for car firms, due to the potential impact it could have on supply chains. Tavares has previously warned that Brexit could potentially lead to the closure of Vauxhall’s Ellesmere Port plant.

Speaking during a press conference on PSA’s 2018 results, where it was announced Vauxhall-Opel had posted a profit for the first time in 20 years, Tavares admitted that Brexit presented a “headache” in terms of the supply chain. He added the firm was already positioning inventory to try and cope with such a scenario – but added his belief that Vauxhall could be positioned to benefit.

“One direction is to say it is going to be a headache in terms of supply chain,” said Tavares. “We have been taking some decisions on that matter and moving inventories to where they should be if that time-lag is going to appear.

“We can go on the dark side and say ‘perhaps we have to shut down plants’, and if we have to make difficult decisions we will. But on the other side, let’s not forget that we have the Vauxhall brand, which is warm to the hearts of UK consumers. Having a British brand like Vauxhall is a significant asset, and something that is unique to PSA.

“We may have almost the opposite opportunity, which is to be the survivor of the automotive industry in the UK, because Vauxhall is a brand that is warm to the hearts of UK consumers. We may be the ones who have the best opportunity to survive and make a business out of it.”

Tavares added that Vauxhall had actually grown in the UK since the vote to leave the European Union. “Since Brexit was announced the overall profitability of the passenger car business in the UK has doubled, our market share has improved and our customer satisfaction index has improved,” he said.

“That is very surprising because since we announced Brexit we have all spent our time saying ‘it’s going to be a nightmare, it’s going to be difficult, blah, blah blah,’ and the sterling has lost significant value – and all of this is true. But the reality is that we have adapted our sales channel mixes, we corrected our pricing, we made cost reductions, we tried to be more thoughtful in the way we do business, and since Brexit was announced out profitability in the UK doubled.

“That means there is no limit to the talent of people. I am not facing Brexit always on the dark side of this outcome: there may be for the Vauxhall brand an opportunity for us. We are managing our marketing communications in the UK in a way that is very supportive of a British brand in the UK.

“We prepare for the two outcomes and will deal with them when it comes up. Most probably there’s going to be a delay, which gives us a little more visibility for 2019.”