In the wake of the Brexit decision, we're likely to see a number of effects on the UK auto industry - in the short term, there are two key impacts.
It's an obvious point but the first thing to consider is the impact on the wider UK economy, both in terms of economic growth and the value of sterling.
A possible slowdown in economic growth is likely to impact on car sales in the UK so, at best, car sales are likely to grow more slowly than otherwise and, at worst, may fall.
However, this negative impact on the auto market may be cushioned to some extent by the likelihood of looser monetary policy, as indicated by the Bank of England Governor Mark Carney, which could help in reducing financing rates (such as on PCP deals) on new cars.
On the currency issue, we have already seen a significant depreciation in the value of sterling. For UK-based auto assemblers, this depreciation should boost exports.
Firms will have a choice of whether to increase output or boost prices to take higher profits. Nevertheless, this should help boost UK auto output over 1.7m units this year.
So "output up but domestic sales down" seems the immediate likely impact on UK auto. At the same time, though, imported cars and components will become more expensive.
That's an issue as on average around 60 per cent of the components going into a UK-assembled car are imported. This will impact on different firms in different ways.
Jaguar Land Rover, for example, source a higher proportion of components in the UK and also have higher margins to play with than, say, Vauxhall with its Astra model assembled in Ellesmere Port.
Both firms have worked hard in recent years to raise their levels of UK sourcing.
That could now be pushed further if sterling settles down at a lower exchange rate (more on the industrial policy implications of this later).
Those auto brands that don't assemble in the UK and only import cars will be negatively affected by the fall in sterling as their cars will become more expensive here (or their margins squeezed).
Meanwhile, eurozone car markets are picking up strongly and the need for some of these assemblers to offload cars onto the UK market is abating.
So, in terms of the auto market here, the bottom line is that imported cars are likely to become more expensive. And, as noted, a slowdown in economic growth is also likely, which will impact on car sales.
The really big issue, though, for UK auto is the huge uncertainty over future trading relations with Europe - that is likely to hit inward investment in the industry in the UK.
Foreign direct investment is key to the modernisation and renewal of the industry, with some £8 billion invested in the sector over the last four or five years.
The trade issue is critical as over 80 per cent of cars assembled in the UK are exported and over 50 per cent of these exports go to Europe.
Maintaining access to the Single Market is therefore critical.
The uncertainty on trade needs to be nailed down as soon as possible so that investors can retain confidence that they can assemble in the UK and export to Europe without tariff or non-tariff barriers.
The UK has yet to say what trading relationship it wants with the EU (Brexiters didn't actually spell out what they wanted and may not actually agree) and it's not clear how the EU will in turn respond.
We don't know how this will play out. During the referendum campaign, some suggested that Norway and Switzerland were examples that could be followed, as they are outside of the EU and enjoy forms of free trade with the EU.
Switzerland's position is somewhat complicated and based on a number of bilateral agreements.
Some sectors of its economy are not covered (services, for example). It's a kind of a-la-carte 'Swiss Cheese' approach.
Like Switzerland, Norway pays in to the EU budget and gets access to the single market (on a comprehensive basis in its case), but must follow EU rules and has no input into devising EU regulations.
In both cases, they are free to negotiate trade deals independently of the EU. Could the UK 'do a Norway' and stay in the single market?
That would minimise the economic damage of leaving the EU but will be tricky given that the Leave campaign had EU immigration as a core issue.
Complete freedom of movement for people in the single market is likely to be a sticking point for the UK, as would paying into the EU budget.
Of course, some auto firms based in mainland Europe will want to continue to trade with the UK (the UK is BMW's second largest market in Europe for example) and are already taking a hit on exports to the UK with the depreciation of sterling.
There will be some desire to get a deal of sorts done.
Yet completely free trade on all goods and services (as now) but without paying into the EU budget or agreeing to free movement of people is probably going to be a non-starter.
A deal will have to be done but the compromise will take time to sort out and that uncertainty is itself a major risk in terms of inward foreign investment in the auto industry.
Even with a trade deal, there is one area where UK auto will definitely lose out and that is the ability to influence regulation in the industry.
Regulation is not going away and, if anything, will become more important as we move towards connected and autonomous cars.
The UK will have no influence on those regulations in Europe when it leaves.
JLR, for example, will have to look to the Slovakian government to represent it at the European level when the UK does exit.
A final possible impact: the auto industry currently has some 5,000 vacancies and needs to be able to hire skilled workers from Europe.
Again, this needs to be sorted out as quickly as possible.
Overall, I'd suggest that the Government has to do more than just strike a new agreement with Europe.
For example, Britain will need to do much more to create its own skills; this means developing better education, better skills training and better re-training programmes as part of a wider industrial policy.
Just as the Government and Bank of England are having to rethink fiscal and monetary policy, so too industrial policy needs to be re-examined.
It's a great shame that industrial policy measures like the Advanced Manufacturing Supply Chain Initiative and Manufacturing Advisory Service have been scrapped recently by Business Secretary Sajid Javid: these poor decisions need to be revisited as quickly as possible.
And, given the recent depreciation in sterling, there is potentially a new opportunity here for reshoring the auto supply chain further.
That isn't going to happen automatically, though, given the barriers to reshoring we have identified in our own work (see here for example).
The key point is that, given both opportunities and risks arising from Brexit for UK auto, a better funded and more active industrial policy is needed to boost competitiveness in UK auto and manufacturing.
Professor David Bailey works at the Aston Business School