The GM subsidiary Opel which is working as Vauxhall in the UK has cut down its production of very famous car line up in the UK. However, Elsmere Port and Luton plants are still importing Vauxhall Astra engines from Germany. The Opel Germany plant has decreased the working hours to almost half and cut the production output at two manufacturing facilities after slower orders from UK followed by Brexit vote.
The manufacturing facilities in Germany which are manufacturing the Corsa hatchback and Vauxhall Insignia saloon cars to their 100 percent capacity for the entire year have reduced the working hours as they received fewer orders from the UK. The Corsa is the second best-selling hatchback in the UK while Ford Fiesta is leading the pack.
Opel manufacturing facility in Eisenach manufactures three-door Vauxhall Corsa models and this facility alone accounts for fifty percent sales of the Corsa. On the other hand, the Russelsheim facility has also been affected by the Brexit vote.
It is not clear yet but Opel/Vauxhall said that these manufacturing facilities will only manufacture the vehicles according to the sales orders from the UK. For Vauxhall Corsa hatchback and Vauxhall Insignia Saloon, the UK is the largest market. For the month of September, Vauxhall already has many orders at the same time when the UK will shift to the new vehicle registration plate.
Increased numbers of new car sales at Vauxhall indicate that the consumers are confident enough to buy new Vauxhall cars. Vauxhall is closely monitoring the after Brexit situation of the market in the UK and said that Vauxhall will carefully decide to invest in the UK. Economic analysts warn that the new car sales will decrease by minimum of 20 percent if the country will go into recession again and at the same time there are number of dealers who have received notifications from their car manufacturers that there will be a great decrease in the new car sales in coming months.
Lookers which has 150 plus dealerships in the UK, thinks similar and expects a sales volume of 2.7 million compared to 2.67 million last year which shows no growth at all. There was a 3.2 percent increase in new car sales recorded in first half of the year but the second half is full of problems.
Opel believes that the Brexit situation has left everyone in the uncertain situation and everyone who has business in the UK or does it with the UK has faced a big bump in their performance after Brexit vote. They will even face the difficulties if the value of the pound sterling will remain same for the entire year. Vauxhall is predicting that they will face a loss of $400 million by the end of this year and it is the loss that they will bear after volatile exchange rates and lost sales due to uncertain market behavior.
