Theresa May’s announcement that Britain will leave the EU’s single market leaves the automotive sector looking for a deal

Britain leaving the European Union single market could “threaten the viability of the [automotive] industry”, according to Society of Motor Manufacturers and Traders (SMMT) chief executive Mike Hawes.

In a speech earlier today, Prime Minister Theresa May said Britain’s exit from the EU would require it to leave the free-trade zone and that the government would be pushing for the "freest possible trade".

UK car production surpasses 1.6 million in 2016

In a following statement, however, Hawes suggested a tariff-free deal was essential in ensuring that Britain’s car industry would remain competitive.

“We need government to deliver a deal which includes participation in the customs union to help safeguard EU trade, trade that is tariff-free and avoids the non-tariff and regulatory barriers that would jeopardise investment, growth and consumer choice,” he said. “Achieving this will not be easy and we must, at all costs, avoid a cliff-edge and reversion to WTO tariffs.”

The SMMT has previously stressed the importance of a free-trade deal and warned of tariffs that could cost the UK car industry £4.5 billion a year.

Aston Martin CEO Andy Palmer welcomed May's propositions, saying: "We strongly believe in the principles of free trade on a global basis, which includes access to and from markets in the European Union. As a company that exports to over 50 markets across the world, Aston Martin supports the principles being taken by the Prime Minister to ensure that British companies have fair access to all global markets. As a company employing a wide diversity of nationalities, we further support the assurances being proposed by the Prime Minister to protect EU citizens living in the UK and UK nationals living in Europe.”"

UK motor industry could face £4.5 billion car tariff

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Comments
4

17 January 2017
'We need access to the customs union and the single market'.... good luck with that. Single market yes, customs union? I doubt it..

17 January 2017
It isn't just Britain’s car industry which would be harmed. There will be global implications if the price of new cars, being built and imported from Europe into the UK, rise too much!

The manufacturers of Britain's top selling cars would also be hit. Seven out of the top 10 best selling cars in 2016 were produced outside of the UK. Ford Fiesta (Germany & Spain), Vauxhall Corsa (Germany & Spain), Ford Focus (Germany), VW Golf (Germany), Nissan Qashqai (UK), Vauxhall Astra (UK), VW Polo (Spain), MINI (UK), Merc C-Class (Germany), Audi A3 (Germany & Hungary).

Producing smaller numbers of right-hand drive cars will mean higher production costs. Higher production costs means the cost of RHD vehicles sold in places like Japan, Australia and New Zealand will have to go up in price to cover the higher production costs. Would the German, French and Italian car industries, the workers and the unions put up with this for long and demand some sort of political change?

Would people in the UK carry on buying the same old cars at a higher price or be more inclined to move to models being produced in places like South Korea where better trade deals are wanted?

Many mainstream manufacturers such as Nissan, Honda and Toyota are manufacturing in the UK for the European market. However, the new Honda Civics are being shipped to the US (a much larger market for them), whilst Jaguars, Land Rovers and even Morgans are being exported in bigger numbers outside of the EU, than inside.

The industry will change. It'll certainly be an interesting time. Hopefully the European Union won't end up cutting their nose off to spite their face.

17 January 2017
Of course there will b a deal for the automtive sector, more so to the german makes.. 800K cars a year to the Uk alone..
Even in a hard brexit, it's in the interest of both sides to play fairly..

17 January 2017
Time for Mr Hawes to earn his keep. I voted Leave but I also voted to join the EEC back in 74 so I would prefer if we could carry on trading without any barriers.
The SMMT need to get on the blower and talk to VAG etc to make sure we're all on the same page. If there are tariffs the Germans will come off worse but all my cars are German (apart from my Series 2) so I don't want to limit my choice when looking for a new car.
However if the EU start fighting dirty I'm happy to vote with my wallet

17 January 2017
Time for Mr Hawes to earn his keep. I voted Leave but I also voted to join the EEC back in 74 so I would prefer if we could carry on trading without any barriers.
The SMMT need to get on the blower and talk to VAG etc to make sure we're all on the same page. If there are tariffs the Germans will come off worse but all my cars are German (apart from my Series 2) so I don't want to limit my choice when looking for a new car.
However if the EU start fighting dirty I'm happy to vote with my wallet

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