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UK slowdown hits Opel’s German production

megan Lampinen | automotive world | 23 august 2016

PA Consulting Group’s Thomas Goettle, an automotive expert, is quoted in an article in Automotive World. Thomas comments on Opel’s decision to introduce short-time working at two of its German plants in response to a slowdown in demand from the UK.

Thomas talks about a recent study from PA which predicts a loss of 100,000 vehicles per year in Germany which stem from Brexit. These would result in the loss of 10,000 jobs in Germany and €3bn turnover. 

Thomas explains: "There has been about a 20% decrease in the exchange rate over last few weeks and months. These cars are getting more expensive in the UK," Goettle pointed out. According to PA Consulting's estimates, Opel earns just €117 profit per car on average. That compares with an average €337 at SEAT at €395 at Volkswagen brand." 

Managing through the Brexit automotive sector - report July 2016


UK car factories face uncertain future – post Brexit research on the carmakers most likely to leave the UK


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Thomas goes on comment on the solution to slowing demand – kurzarbeit, or short-time working. He says: "This has been an instrument in Germany since 2009. It is mostly subsidised by the government, and very good to respond to short-term downward fluctuations in demand."

Thomas goes on to say: "It allows a company to keep all its highly skilled labour. If you fire people it could lead to big recruitment problems after the economy rebounds."

Thomas predicts similar moves from Volkswagen and Ford, and possibly PSA Groupe, in the near future. He says: "I am a bit surprised the first one has already kicked in. It could be they have a slowdown in demand right now and are labelling it as Brexit."

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