EU motor industry leaders unite against ‘no-deal’ Brexit

Organisations representing vehicle and parts makers across EU and UK call for no-deal to be ruled out to avoid “severe” consequences

The European Union’s leading automotive industry bodies have joined forces to stress the “catastrophic” impact a potential ‘no-deal’ Brexit will have on the sector. 

With five weeks to go before the UK is due to leave the European Union, industry chiefs from bodies such as the European Automobile Manufacturers Association (ACEA), Committee of French Automobile Manufacturers (CCFA), the German Association of the Automotive Industry (VDA) and the UK’s own Society of Motor Manufacturers and Traders have all released statements. 

There were a total of 23 signatories from numerous industry bodies from countries across the European Union, many stating their concern about the lack of frictionless trade, customs delays harming the industry’s just-in-time operating model and the potential for WTO tariffs to add £5bn in tariffs on UK exports to the EU.

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Benhard Mattes, VDA president, said “The United Kingdom is a fully integrated player in the value chain of the German Automotive Industry. More than 100 production facilities as well as research and development located in the UK prove our commitment to the UK-market as a number one market in the EU. 

In the view of the German automotive industry, therefore, everything has to be done to maintain the free movement of goods, of services, the freedom of capital and the freedom of movement for workers between the UK and the EU.”

SMMT chief executive Mike Hawes reiterated his warning that no-deal would “an immediate and devastating impact on the industry, undermining competitiveness and causing irreversible and severe damage.

He also said that “UK and EU negotiators have a responsibility to work together to agree a deal or risk destroying this vital pillar of our economies.”

Sigrid de Vries, Secretary General for the European Association of Automotive Suppliers, highlighted the intense integration amongst the UK and European parts industry. 

“A single vehicles consists of around 30,000 parts, many of which cross borders multiple times. Frictionless and tariff-free trade, as well as regulatory certainty, is vital. Brexit has a negative effect on all these aspects.” 

The SMMT’s own report suggests delays to the arrival of components causing production stoppage would cost the UK £50,000 a minute. That, combined with significant tariffs, would very likely raise prices for consumers with many companies likely to struggle to absorb the costs. 

Read more:

Analysis: Brexit and the UK car industry

No-deal Brexit could cost UK carmakers billions in emissions fines

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Source: Autocar

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