Brexit is having a negative effect on the British automotive industry and particularly digital ad spending within the sector.
According to estimates from eMarketer, the UK automotive industry will spend £1.94 billion in digital ads in 2019, representing 13.2% of all digital ad spend.
But overall growth rate projections for 2020 are down (8.1%) compared to 2019 (9.2%) and 2018 (15%).
That’s not to say that ad spending within the automotive industry isn’t still growing, but digital ad spending is down 0.2 percentage points from 2018.
By 2020, the industry’s share of the digital advertising industry will drop to 12.9%.
“The specter of Brexit has loomed large over the UK auto industry for the past three years,” explains Bill Fisher, a senior analyst at eMarketer. “But a no-deal Brexit will hit this industry particularly hard. Complex and well-integrated supply chains have operated largely tariff-free for many years, but if the UK has to operate on World Trade Organization [WTO] terms in the event of no-deal, then potentially large tariffs will come into play. And auto manufacturers don’t want to have to deal with that, hence the high-profile retrenchments we’ve seen.”
Ad spend is still evenly distributed across display and search and the majority (67.7%) will go to mobile.
Overall, UK car makers produced 21% fewer cars between May 2018 and May 2019 with 52.6% of exports going to the EU. Some automakers such as Toyota shut down plants this year.