EU automotive leaders warn of impact of no-deal Brexit

Time 9:36 am, September 23, 2019

THE European automotive industry today issued a united plea for the UK and EU to avoid a no-deal Brexit amid warnings of a ‘devastating’ impact on the sector.

Organisations representing vehicle and parts manufacturers across the European Union, including the Society of Motor Manufacturers and Traders (SMMT), joined forces to warn of the potential impact of no deal being achieved before the split.

The groups said the automotive industry was one of the EU’s biggest success stories and contributors to growth and wealth, producing 19.1 million vehicles a year and employing 13.8 million people across the wider sector – one in 16 of the EU’s workforce.

The integrated nature of the industry has been fundamental, maximising single market and customs union benefits to the advantage of businesses EU-wide, said the groups.

They warned that the repercussions of no deal to the sector would be ‘severe’, triggering a ‘seismic shift’ in trading conditions, with billions of euros of tariffs threatening to impact on consumer choice and affordability on both sides of the Channel.

Mike Hawes, SMMT chief executive, said: ‘European Automotive is deeply integrated and the benefits of free and frictionless trade have helped our sector become one of Europe’s most valuable assets, delivering billions to economies and supporting millions of livelihoods across the EU.

Mike Hawes

‘A no-deal Brexit would have an immediate and devastating impact on the industry, undermining competitiveness and causing irreversible and severe damage. UK and EU negotiators have a responsibility to work together to agree a deal or risk destroying this vital pillar of our economies.’

Christian Peugeot, president of the Comité des Constructeurs Français d’Automobiles (Committee of French Automobile Manufacturers), said: ‘Brexit is not just a British problem. We are all concerned in the European automotive industry, and even further. Be it as exporters to the UK market or producers locally, which we are both, we will inevitably be negatively affected.’

Bernhard Mattes, president of Germany’s Verband der Automobilindustrie (Association of the Automotive Industry), said: ‘We regret Brexit. 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.’

A spokesman for the Department of Business, Innovation and Skills said: ‘We will be leaving the EU on October 31, and it is our preference to do so with a new deal that is in the interests of both our businesses and citizens.

‘The UK automotive industry remains one of our great success stories, at the forefront of designing and manufacturing cutting-edge vehicles that are exported internationally.

‘We have turbocharged preparations for Brexit across all sectors, including automotive, with £108m of funding to promote and support businesses to ensure they are ready for Brexit and can take advantage of the opportunities of our future outside of the EU.’

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