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Brexit fears prompts Opel to cut production

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Lower demand of two Vauxhall models in the UK, blamed on the Brexit vote, has led Opel to cut working hours at two German plants.

The vote in June to leave the EU is said to have led to lower demand for the Vauxhall Corsa and Insignia. The UK is the biggest market for both vehicles.

"We can confirm that there will be short-time work in the plants in Ruesselsheim and Eisenach during the course of this year," Opel said in a statement. It said that the number of days when shorter working hours apply would depend on the sales volume of the two cars in the UK.

"The Brexit situation is an issue for everybody who does business in and with the UK at the moment and we already announced last month that there will be an impact on our European financial performance if the value of the pound remains at its current level for the rest of the year," Opel said.

Along with Ford and PSA, Vauxhall put up car prices in July. “The price increase in July was the result of exchange rate decline increasing our costs. It was a straightforward rise – the dealer margin is a percentage of list price,” said a spokesman.

Pre-Brexit, the strong pound had boosted profit potential for importers to the UK. Its post-Brexit fall has reversed this, with concerns expressed at the stability of consumer confidence.

The Astra, and the Opel Sports Tourer, are built at Ellesmere Port, with engines coming from continental Europe.

The Vivaro van is made at Luton.

Society of Motor Manufacturer and Trader figures show Corsa sales down 12% in July year-to-date compared to the same period in 2015. Insignia sales were down 24%. Total Vauxhall sales were down 4%.

But the slide isn't a new phenomenon: sales of the two models were down 17% and 27% respectively in April, before the referendum vote. Total sales were down 4.5%.

More on the impact of Brexit:

 Ford price hikes and factory closures 'on table' post-Brexit

 Brexit just a 'bump in the road' on the way to 3m new car market - Lookers' boss

 PSA Group joins post-referendum price hikes



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Comments

  • malc - 22/08/2016 15:50

    Why is everything blamed on Brexit? The performance of both models pre-referendum is reflective of two very old models in the market place versus lots of new and facelifted competitors . . . and much stronger PCP deals and retention from other Manufacturers. What's the excuse for the April performance?

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  • Mark - 22/08/2016 22:45

    Brexit. The one size fits all excuse for failure, bad planning and anything else inconvenient.

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