Even as some auto stocks panicked in the wake of the Brexit result, the issue is unlikely to impact the Indian auto sector in the near term. However, it could cause some jitters among auto parts makers due the possible threat of currency fluctuations.

As far as exports are concerned, barring Maruti Suzuki and Nissan, carmakers’ exposure to Europe is negligible, if not zero. Most of the vehicle makers use Indian operations to predominantly serve the local and non-European markets.

“We are totally insulated from any impact of this development in Britain as we have no exports to Europe, including the UK. However, we have to wait and see whether Brexit leads to any structural changes in the European market over the long term,” said Rakesh Srivastava, Senior Vice-President, Sales and Marketing, Hyundai Motor India Ltd.

Gopal Mahadevan, Chief Financial Officer of Ashok Leyland, dismisses any big threat to India. “If you see from India’s perspective, our country’s position in the global trade is not very significant. Our trade is more with Europe after US and China.So, I don’t think Brexit is going to have any issue for us,” he said.

“Actually, some early analysis seems to be telling that it could be beneficial for us. It could lead to a multiplier effect in terms of trade ties between India and the UK, and India and the EU as two separate groups.

“I believe the UK has also set up a trade desk specifically for India. So they want to ensure that the trade ties with India are strengthened,” he added.

However, he is not ruling out the possibility of impact on auto parts firms that have a big stake in the UK market. The EU today accounts for 35-40 per cent of auto component exports from India, which could potentially be impacted by market volatility and by any slowdown in the region due to policy uncertainty.

Trade negotiations “OEMs also export passenger vehicles from their Indian manufacturing units, which may get impacted in the event of any slowdown,” said Subrata Ray, Group Vice-President, Icra.

“The overall Brexit process, however, is expected to take about two years. The final outcome would depend on how the existing trade and regulatory arrangements are negotiated,” he added.

Meanwhile, some auto stocks such as Tata Motors and Motherson Sumi witnessed a slump on Friday.

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