Content thumbnail European attractiveness survey January 2017
LONGER-TERM AGENDA

ey.com/attractiveness EY point of view: automotive Sustaining performance As we do not know yet when, how and under what conditions a Brexit costs and in order to adapt to new technology and changes, such as the will be executed, it will remain important to think in scenarios and to spread of electric cars and the emergence of ride-sharing business models. build maximum flexibility and agility in any strategic programs. The The devaluation of the sterling has already undermined the margins of automotive industry faces significant uncertainty as Brexit unfolds. The car-makers selling into the UK. Several companies have raised prices and UK is the fourth-largest light vehicle manufacturer in Western Europe. begun cost-control measures. Higher prices are likely to cut demand in In the first half of 2016, UK output was 897,157 cars, up 13% year-on- the UK. year. The UK industry is closely integrated with that of the Eurozone both in terms of component supply and sales. EU customers are big buyers of We believe that uncertainty does not mean “wait and see.” Companies British-made cars, and the UK is a leading market for vehicles imported that fail to act will cede a strategic advantage. We recommend that from Germany, Spain, France, the Czech Republic, and elsewhere. carmakers increase scenario planning and develop agility. Supplies of components flow back and forth across the Channel. Now Brexit hangs over a European car industry that already has excess Jörg Hönemann vehicle-manufacturing capacity, and is reshaping itself in search of lower EY Germany, Austria and Switzerland (GSA), Automotive team leader EY’s European attractiveness survey January 2017 13

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INTRO
EY's attractiveness surveys and program Contents How EY designed the research An EY survey on foreign investment Ten lessons learned (1-5) Ten lessons learned (6-10)
FOREIGN INVESTORS
Keen on Europe, yet cautious Global economic volatility and fragmentation EY POV - Jeremy Jennings EY POV - Alessandro Cenderello More active investment strategies EY POV - Jean-Benoit Berty
PAN-EUROPEAN INVESTMENTS
A rethink of pan-European investments EY POV: automotive -Jörg Hönemann The UK's attractiveness will be affected EY POV - Mark Gregory Europe's FDI map starting to shift Corporate income tax rate across Europe Cities compete for foreign investment
MANAGING THE PRESENT
Investors in Europe are focused on managing the present Deterioration in operating margins Plans to redesign supply chains EY POV - Olivier Macard EY POV - Mats Persson
LONGER-TERM AGENDA