Currently reading: Leading EU automotive bodies warn of potential Brexit damage
The automotive bodies' stance on protecting the industry in the wake of Brexit reflects that of the UK equivalent, the SMMT, according to its chief executive Mike Hawes
Rachel Burgess
News
3 mins read
27 April 2017

The automotive industry will be dramatically affected by Brexit if there are any major changes to the way it currently works across Europe and the UK, according to the European automotive body, the European Automobile Manufacturer’s Association (ACEA) and CLEPA, the European Association of Automotive Suppliers.

Speaking ahead of this weekend’s EU-Brexit Summit, ACEA Secretary General Erik Jonnaert noted that today, the industry in the UK and Europe is closely integrated “from the economic, regulatory and technical points of view”. He said: “Any changes to this level of integration will most certainly have an adverse impact on automobile manufacturers with operations in the EU or the UK, as well as on the European economy in general.”

It is the first time the European bodies have spoken out on the matter, and echoes the views of the British Society of Motor Manufacturers and Traders, according to its chief executive Mike Hawes. He said: "We're keen to stress that the UK automotive industry is part of the European industry. These European organisations clearly reflect their members' interest. The fact that they are aligned with us is an important message."

According to the ACEA and CLEPA, the impact is most likely to be felt in areas incuding tariffs, customs procedures, the regulatory framework and access to labour. Tariffs, for instance, could amount to 10% for passenger cars, 10 to 22% for commercial vehicles, and 3 to 4% on average for parts and components.

Sigrid de Vries, Secretary General of CLEPA, echoed Jonnaert’s views, saying: “The EU Single Market represents a fundamental driver of global competitiveness. Vehicle manufacturers and component suppliers are entangled in a highly integrated manufacturing network spanning Europe.

“Tariff- and burden-free market access, as well as a stable and predictable regulatory framework, are crucial instruments to sustain the supplier industry’s technology leadership and secure investments and jobs.”

The SMMT's Hawes added: "If we have to impose tariffs, it would be felt on both sides of the channel, but in slightly different ways. There will be an increase in sticker price. And if the price of vehicles go up, it would effect export volumes coming into the UK. UK consumers would also be paying more. And for those who export from the UK, they will have to swallow that 10% because you can't push it on to European consumers." He added that the "worse-case scenario" would be World Trade Organisation tariffs. "Hopefully we don't have to revert to WO tariffs."

When asked whether manufacturers might consider opening plants in the UK if tariffs were imposed - PSA boss Carlos Tavares has already referenced such a move in relation to the purchase of Opel - Hawes commented: "The industry is very agile and adaptable and will always look at mitigating costs. If there are borders going up, that does compound the need for local suppliers to get around those borders.

"There are so many factors involved in supply selection, including cost, quality and innovation. But if this [tariffs imposed by Brexit] encouraged people to invest in UK that would be a positive."

The automotive industry is a major point of negotiation in Brexit discussions. Today, the EU is the UK’s biggest trade partner. More than half of all the cars and 90% of all the commercial vehicles built in the UK last year were bought by customers in Europe.

Advertisement
Advertisement

Find an Autocar review

Read our review

Car review
Ford Fiesta
Fiestas sold in Europe are ostensibly the same as those sold in America and Asia

The seventh-generation Ford Fiesta is the UK's best selling car, helped by frugal engines, handling verve and a big car feel

Back to top

In addition, the EU represents more than 80% of the UK’s motor vehicle import volume, and is worth €42 billion. Seven out of every 10 new cars sold in the UK come from EU plants.

Overall, the automotive industry in the UK and Europe represents 6.5% of the EU’s Gross Domestic Product (GDP) and provides employment for 12.2million people.

 

UK car manufacturing hits 17-year high thanks to growing exports

Brexit: EU single market is ‘critical’ to UK automotive sector

Brexit: Bentley could shift production to Europe in ‘worst case scenario’

Join the debate

Comments
15
Add a comment…
Straff 27 April 2017

Always remember one thing

Always remember one thing. We won. Get over it
concinnity 28 April 2017

Always remember one thing. We won (by 2% & 20% didn't vote)

"Always remember one thing. We won. Get over it"

In the same way and the same proportion as the Mango Mussolini did in the USA. That's working well isn't it?

Why do the Brexiteers such as Straff refuse to discuss any possible ramifications or strategies or even potential problems with it?

What are they so insecure about? Surely they want the best result for their country and not for everyone to be worse off?

Rtfazeberdee 28 April 2017

I love seeing this "We won. Get over it"

total proof they have no argument, only xenophoiba
batteredmotorist 27 April 2017

Life after EU via Brexit

I'm upbeat with reasons. We don't need the overkill of a 'customs union' with the EU, the government is going for a customs cooperation agreement. It has the new WTO Trade Facilitation Agreement behind it.

Few people know that it is actually EU policy to have a free trade agreement with major trading partners (Check its website). That could take a while, but we could fall back on Norway-like membership of the EEA (European Economic Area) with free trade and zero tariffs or possibly a 'WTO waiver' - a special dispensation for up to 2 years' temporary arrangements.

Ski Kid 27 April 2017

I bet Ford will regret loss of Uk manufacture

We should charge double for Transits now made in Turkey after receiving an EU grant to make the Uk Ford workers redundant thank gooddness we are coming out.The nestle products to v be made in Poland should be charged double to pay for the 300 uk Nestle worlers to be made redundant.

Find an Autocar car review