Currently reading: UK car industry 'welcomes' tariff-free post-Brexit trade agreement
Trade deal agreed between UK government and European Union should allow for tariff-free trade of cars and car parts

British car industry bosses have welcomed the post-Brexit trade agreement reached between the UK and the European Union, which is set to avoid the introduction of tariffs on cars and car parts.

The trade deal, which Prime Minister Boris Johnson estimates is worth around £660 billion, was agreed after years of negotiation between the UK government and EU officials. The deal still needs to be ratified by both the UK parliament and the 27 EU member states.

Johnson described the agreement as a “comprehensive Canada-style free trade deal”, and said it will “allow UK goods and components to be sold without tariffs and without quotas in the EU market.”

European Commission president Ursula von der Leyen said: "It was a long and winding road, but we have got a good deal to show for it. It is fair, it is a balanced deal, and it is the right and responsible thing to do for both sides."

The full text of the deal has yet to be released, and while the deal will avoid tariffs it will introduce extra paperwork for goods shipped across the UK-EU border. The new agreement also includes continued co-operation on issues including climate change, energy and transport, although details of what this entails have yet to be released.

Car industry reaction to the new UK-EU trade deal

UK car industry leaders have repeatedly pushed for such a tariff-free trade deal, which they said was vital given the frequent movement of both car parts and completed vehicles across the UK-EU border. More than 85 per cent of the cars made in the UK are exported, with the EU the biggest single market.

The Society of Motor Manufacturers and Traders (SMMT) had estimated a no-deal Brexit could cost the car industry £55 billion in five years, and add an average of £2000 to the price of a car in the UK.

SMMT boss Mike Hawes welcomed the new deal, saying it “provides a platform for our future relationship.”

He added: “We await the details to ensure this deal works for all automotive goods and technologies, including specifics on rules of origin and future regulatory co-operation. A phase-in period is critical to help businesses on both sides adapt and efforts should now be sustained to ensure seamless implementation, with tariff-free trade fully accessible and effective for all from day one.

“We will continue to work closely with government to ensure all companies are as prepared as possible in the limited time left.”

The European Automobile Manufacturers' Association (ACEA) also welcomed the deal, which it described as "a great relief" for manufacturers that avoided "the catastrophic effect of a no-deal Brexit".

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“There is no other industry that is more closely integrated than the European automotive industry, with complex supply chains stretching right across the region,” said ACEA head Eric-Mark Huitema.

But the ACEA noted that it could not make a full assessment of the deal until the full agreement was revealed, and noted that the agreement would introduce "even more red tape and regulatory burden" for the industry.

Huitema added: "Major challenges still lie ahead, as trade in goods will be heavily impacted by barriers to trade in the form of new customs procedures that will be introduced on 1 January 2021.”

In a statement, Ford of Europe president Stuart Rowley said he welcomed the agreement. He added: "We believe this agreement will help sustain the vital role of the automotive industry to European economies today, while also providing stability as the industry transitions to new technologies and opportunities for the future.

"It is now important to understand the detailed rules of origin which will apply and to create as smooth a transition as possible by maximising flexibility as businesses adjust to the new trading environment. We also urge the swift conclusion of a trade deal between the UK and Turkey."

Sue Robinson, the head of the National Franchised Dealers Association (NFDA), said: “It is positive that the UK Government has reached a Brexit deal with the EU that avoids tariffs on vehicles and vehicle parts. As an industry, we now have further clarity, which will enable greater investment into the sector and support consumer confidence.”

Daksh Gupta, the boss of leading car dealer Marshall Motor Group, tweeted that the deal was "a great Christmas present". He added: "This is great news for the automotive industry. Brexit has cast a shadow over our sector for four-and-a-half years."


No-deal Brexit 'cost cost UK car industry £55 billion in five years'

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James Attwood

James Attwood, digital editor
Title: Acting magazine editor

James is Autocar's acting magazine editor. Having served in that role since June 2023, he is in charge of the day-to-day running of the world's oldest car magazine, and regularly interviews some of the biggest names in the industry to secure news and features, such as his world exclusive look into production of Volkswagen currywurst. Really.

Before first joining Autocar in 2017, James spent more than a decade in motorsport journalist, working on Autosport,, F1 Racing and Motorsport News, covering everything from club rallying to top-level international events. He also spent 18 months running Move Electric, Haymarket's e-mobility title, where he developed knowledge of the e-bike and e-scooter markets. 

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Strider 4 January 2021

The key point is from Ford, that it's the rules of origin that are key. Sue Robinson is wrong when she says this deal avoids tarrifis on vehicles and parts. My understanding is that this is only the case if 100% (TBC) of the value of the vehicle is created in the UK or in Europe. That's simply not the case. When we were in Europe, we benefited from more than 70 FTAs that allowed content from other countries to be included in the 'European' content and our supply chains have been developed with that in mind. All of those FTAs have been given away and is part of the reason why Honda decided not to build electrified vehicles in the UK. 

Peter Cavellini 26 December 2020

  We're moving,

               Like it or lump it, wether your for or against Brexit, or your Country is British, French or  German, the fact remains, it's going to be the same for all of us, we're all going to have to cope with the changes. The things we've heard about seem to suggest we get more say in how we interact, more fair trading etc, etc, personally, I thought the rest of Europe had more to lose than the UK.

Strider 4 January 2021

We now have to comply with European safety standards (or not sell our cars into Europe) that we have no influence over. We have to comply with European emissions standards (or not sell our cars into Europe) that we have no influence over. We even have to send our cars into Europe to be homologated because our right to test our cars to European standards has been voted away. From where I sit on the technology side of the car industry, we've lost too much control and gained nothing.

Citytiger 25 December 2020

What will remainiacs moan about now, perhaps they will complain tht they dont like the colour of the paper the dea is printed on, or something else just as pathetic. 

scotty5 25 December 2020

Ford says : We believe this agreement will help sustain the vital role of the automotive industry to European economies today, while also providing stability as the industry transitions to new technologies and opportunities for the future.

Would this be the same Ford that whilst the UK remained in the EU, moved production out of the UK making thousands redundant in the process? They closed down car production, commercial production and also some of their engine plants. Van production moved to Turkey, the Sierra's replacment, the Mondeo went to Belgium and the Fiesta moved to Spain, all whilst we were part of the EU.

So many lies have been spoken over the last four years making some people believe being part of the EU would protect jobs in the car industry when all along, we've been loosing jobs. As Joe Royale woud say, 'stability' my ar5e. We'll continue to gain and loose jobs whether we're in the EU or not.

cambuster 4 January 2021

Well said - and don't forget the huge number of Ford vehicles and engines (ne Bridgend) now built and imported from Romania, and India (and the US, and Canada).  The UK fed massive profits into Ford for decades, yet a few years ago the big heads at Ford decided to fully exit UK production and manufacturing and treat it only as a sales territory (the former head office, sold, and currently being converted into flats - as per the Dagenham site). Turkey has long wanted to build the diesel engine for Transit, so stand by for the closure of Dagenham diesel plant. Many are not fooled, with Ford's UK market share having, quite rightly, plummeted.   Ford should not be asked for a comment, these people are blockheads, spending years foisting Eco-Sport on an unsuspecting market when "Puma" should have been built as the "Fusion" replacement, 11 years ago! 

Strider 4 January 2021

The quote you highlight says 'European econonomies' not the UK economy. We are no longer in Eruope. Brexiteers forget we are in a global market. Big companies have a dynamic manufacturing footprint and will move to lower cost locations. The only way to keep them here is to ensure that the UK is a better place to build globally competitive vehicles.

Andrew1 25 December 2020
"Remainiacs" will keep telling you that Brexit is a monumental mistake and you'll just have to live with it, just as we have to live with Brexit being forced on us. 52% doesn't make you right, it just makes you many.
Strider 4 January 2021

We might moan that the Brexiteers (we'd never be as rude or use such nasty, undemocratic language as the Brexiteers choose to fire at us) don't look at the actual facts before making their big brush statements. It's true that we have a deal with Europe, but you have voted away more than 70 FTAs between  Europe and other countries. Our deal does not include diagonal agreements, so content from outside the UK and Europe is now liable for tarrifs, even if assembled into a UK car. That's part of the reason that Honda decided not to assemble electrified vehicles here. Our UK supply chains and British vehicle designs are built around globally sourced components. You may say well, source them from the UK, but often that simply isn’t possible. The type of high-capital plant required for much component manufacturing must be utilised for customers worldwide or every component it makes becomes unafordably expensive.