It’s been a bumpy road for many in the automotive industry in recent months – and the last few weeks, in particular.
The impact of the global pandemic and a series of national lockdowns had already hit manufacturers and dealerships hard. And then came Brexit.
But for Subaru, it’s business as usual.
Continue to buy and own with confidence
There’s no doubt that the Prime Minister’s negotiation of an eleventh hour trade deal between the UK and its former partners in the EU was welcome news for the automotive industry. But many manufacturers are now scrambling to work out what the agreement will actually mean for their business models – and the hundreds of thousands of British people that drive their vehicles.
At Subaru, however, we’re able to reassure our customers that nothing will change.
When it comes to Brexit, you won’t notice any difference in the smooth way we run our business operations. (The same certainty probably can’t be applied to the supply of Brussels sprouts or your flour in the coming months though.)
The reality is that Brexit hasn’t had – and won’t have – an impact on the way we supply and service our vehicles.
Prospective Subaru owners can buy with complete confidence, while existing Subaru drivers can continue to benefit from the exceptional ownership experience and supreme reliability you’ve come to know and expect from our brand.
Brexit has a big impact on some manufacturers
Other automotive brands may well find themselves in a different boat.
Ford, for example, has recently admitted that UK drivers will have to pay significantly more for two of its popular models (which are made in the EU), because the manufacturer is passing on the cost of trade tariffs introduced after Brexit.
Manufacturers with vehicle production plants in the UK – Jaguar Land Rover, Nissan, Honda, Toyota, BMW/Mini and Vauxhall – are also faced with major implications and cost considerations as they assess the impact of the Brexit deal for car owners and for their businesses.
Industry analysts suggest that a significant number of these brands might struggle to qualify some UK-assembled models for tariff-free export to the EU (a key market for most manufacturers), because the levying of tariffs depends on the origin of source for the components used in each vehicle. The same is true for the supply of parts and accessories coming into the UK market.
Honda has already been forced to temporarily close its Swindon production plant due to Covid-19 and is now reportedly suffering the effects of a shortage of parts and components for its vehicles. It’s understood that other manufacturers are also struggling with post-Brexit parts supply from EU countries to the UK.
But Brexit is having an even bigger impact for some – forcing certain manufacturers to think long and hard about whether they want to be in the UK at all.
Honda announced last year that its UK manufacturing plant will be closing down for good in 2021 and Nissan had shelved plans to build new models at its Sunderland plant – until deciding that the new trade deal would enable it continue. Last July, Mitsubishi announced its decision to exit the UK and European sales markets completely, leaving just an aftersales operation in place to support current customers.
Subaru’s business model is a key strength
Subaru is the only manufacturer of vehicles for the general UK market that operates a dedicated import and distribution business. This key strength is now giving our dealers and our customers a definite edge.
Our vehicles have always set us apart – Subaru is renowned for building cars that provide outstanding safety, capability and reliability. But the way we operate our business also plays a crucial role in the confidence we’re able to give our customers.
Subaru owners know their own minds. And, just like the people who choose to drive our vehicles, we like to be informed decision-makers in a business context too.
So you’ll find that we’ve been scenario planning for the potential Brexit negotiation outcomes for quite some time. Subaru staff were also working across the Christmas and New Year period to ensure the uninterrupted supply of vehicles and parts, whatever the final agreement with Europe.
While we had complete conviction in our own ability to operate suitably efficient systems to deal with the impact of a last-minute Brexit deal, we couldn’t be 100% sure about how UK ports would handle the sudden transition. So we took the precaution of buying in 4 months’ worth of fast-moving and maintenance parts for our vehicles – to ensure that our customers would be completely unaffected.
The upshot of this foresight is that there is absolutely no shortage of Subaru parts in the UK. We also had cars continuing to arrive on our shores throughout the transition period, with no hitches or hold-ups at all (and at the same cost as before Brexit).
Vast import and distribution expertise
This smooth experience is testament to the vast amount of expertise that we’ve amassed over the past five decades of supplying vehicles to the UK automotive market. Subaru is probably one of the most efficient import and distribution businesses in the UK.
Subaru vehicles are manufactured in Japan. Our parent company, International Motors (part of IM Group), is the sole importer and distributor for Subaru and has over 40 years of business experience in the UK. As well as being the name behind the Subaru brand, International Motors acts as the sole importer and distributor for Isuzu vehicles, and previously did the same for Maserati, De Tomaso. It also launched Hyundai and SsangYong in the UK, and ran the Daihatsu distribution operation for many years.
The majority of European manufacturers’ cars and their components have a source of origin in Europe itself – so they will be immediately affected to a significant degree by trade tariffs imposed when those items are shipped across the new trade border to the UK market.
The additional considerations of making an entry into the UK from mainland Europe and taking a product across borders can also cause associated delays and extra operational expense – added costs that the manufacturer has to decide whether to absorb or potentially pass on to customers. With only about 5% of our components sourced in Europe, this makes very little difference to Subaru.
Our expert teams deal with importing and distribution day in, day out, and have spent years studying best practice processes as part of our worldwide operations. Subaru invests in bonded warehousing in the UK, for fast-tracked customs logistics and handling, and we also have a direct link into HM Customs & Excise. All of this careful planning and know-how means that we’re not impeded by any of the bumps and potential obstacles that Brexit has thrown into the path of some other manufacturers.
Delivering the rewards of two trade deals
There’s also another ball in play… Throughout the Brexit process, Subaru HQ in Japan has been watching keenly. Not least because the UK and Japan have been working on agreeing a new trade deal at the same time – the UK is a key market for Japanese exports, along with the rest of Europe.
The presence of a deal with any trading partner automatically mitigates the impact of import tariffs that might ordinarily be levied. But Subaru is benefitting from the existence of trade deals with both Europe and Japan, so it’s almost a win:win situation.
When you consider that all of our vehicles and 95% of our components are sourced from Japan, rather than Europe, it’s clear to see this makes a big difference in terms of the impact of Brexit on our business – and our customers too.
Make it an even smoother ride when you choose Subaru
If you’re looking to buy a new Subaru, now’s a great time to do just that – not only will you be making a great decision, but you’ll be able to make it with complete confidence.
Be sure to check out our fantastic Trade In and Trade Up promotions for Outback and Forester, and there are also great Subaru finance offers available on XV. Take a closer look at our winter special offers here.
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