The government will push for tariff-free access for cars to the EU market post-Brexit, business secretary Sajid Javid told the Society of Motor Manufacturers and Traders (SMMT) International Automotive Summit today.
Getting access to the EU market without cost barriers is one of the key objectives of the UK car industry in the next two years of trade negotiations that will create the post-Brexit business environment.
Tariff-free access will ensure that UK-built cars don’t suffer a cost penalty. But with tariffs working both ways, the UK would be expected to introduce a similar 10% tariff on EU-built imports into the UK.
“Top of my list is getting the tariff-free access to the EU market that the car industry needs,” Javid told a packed audience in London.
The car industry fears that the EU will lumber cars built in the UK with a 10% tax that will push up costs. Components and parts, such as finished engines, many of which are built in the UK, might attract a 5% tariff.
Javid also asked the car industry to engage with government and provide input for the coming two years of Brexit negotiations with the EU.
“What do you need for the negotiations that are coming?" he said. "We will have to build from the ground up – and I want to hear from you. You know your suppliers best.
“The auto sector has also been a model of co-operation with government, with the private sector coming together with government to generate success."
Javid also praised the car industry’s strengths in his speech, listing technical advances and problem solving as strengths the industry can be proud of. “You are innovative and you rise to challenges," he said. "These are qualities that will matter going forward.”
The government is also planning to ensure that investment continues in the car industry.
“The UK is a leading destination for international investment in manufacturing and we cannot afford to turn our backs on the world,” said Javid.
“In a sky full of stars your sector shines brighter than most, with a vehicle off the lines every 16 seconds, most for export.”