Martin McVicar, chief executive of Monaghan-based forklift maker Combilift, which sells 25 per cent of the vehicles it assembles to the UK, recalls that the company hedged against this by buying as many components as it could from British suppliers, thus using cheaper sterling to cut costs, offsetting the impact of the more expensive euro on the price of the finished trucks.
Combilift changed that policy a year ago as a hard Brexit – that is the UK crashing out of the EU without a deal – seemed more likely.
“We are very purposely looking for suppliers outside the UK,” he says. “We are still dealing with UK suppliers that we have always dealt with, but now we are looking more on mainland Europe. The last thing we want to be doing is paying import duties.”
A “no-deal” Brexit would leave Combilift’s customers paying 4.5 per cent tariffs on the forklifts they buy, while the company itself would pay the same on components that it imports from the UK. McVicar says that while the number does not seem high, it’s a “massive” difference for both his company and its customers.
That does not mean that the forklift maker will desert the UK, which will remain an important market, albeit a tougher one that demands a new approach to competing for business. Another strand of Combilift’s strategy is to ensure it is selling something there that no one else has.
“Over the last 18 months we have really increased our investment in research and development,” McVicar explains. “If we can develop more innovative products, we can charge more of a premium from our UK customers and we can still have a viable business there.”