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

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.

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.

 

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Comments
15

27 April 2017
Autocar; please stop publishing this anti-Brexit propaganda. No-one knows what will happen when we leave the EU at the moment and probably won't do for some time. In addition, this sort of inflammatory drivel is biased towards certain parties in this General Election period. It is unnecessary and offensive. Please give it up; if I wanted politics I'd watch the party political broadcasts, perish the thought.

27 April 2017
In principle everyone already does (know). Stuff that goes to the UK to make cars will meet tariffs, so do the cars that will be imported into the EU (UK's major export market). There's simply no way of avoiding this. If only for the simple fact that it makes other car making EU member states more competitive price wise. Yes, May will undoubtedly solidify her political position in British Parliament. But that does not change anything from the EU's perspective. I am not gloating. The EU is guilty too of letting this all happen. IMO, it would be best of reverse Brexit, and allow individual EU countries to have a major say when it comes to immigration issues as well as some domestic economic affairs. To start with, the UK. The SMMT ought to be worried. Very worried.

27 April 2017
Straff wrote:

Autocar; please stop publishing this anti-Brexit propaganda.

I don't understand. How is reporting comments by a trade body "propaganda"? I haven't seen where Autocar said they were agreeing or disagreeing with the comments.
If Autocar were to report on comments expressing an alternative view would this be "propaganda" as well?

28 April 2017
They have no comprehension of what they read

27 April 2017
Straff, as far as I can see the article merely sets out some facts as highlighted by the EU automotive industry today (which includes UK producers, note). EU's share of UK motor exports, default tariffs on motor vehicles, etc.

It's hard to see how anyone could consider these facts as 'offensive' or 'cr*p' or 'inflammatory drivel'. Do you not agree with the figures?And the article says in fact very little about what might happen when the UK leaves the EU. Let's try and keep things in proportion.

27 April 2017
Autocar, interesting article. It's Straff's 'Crush the Saboteurs' rhetoric that is pure propaganda. The idea that any discussion around the details of potential trade-deal effects should only be positive is laughable, if it wasn't so bloody sinister.

27 April 2017
Most of the British industry is foreign-owned and it relies heavily on exports to the EU particularly, which in turn determines the fate of hundreds of thousands of jobs.

Nissan alone have stated that any delays in their supply chain will cause business to become unproductive if those delays are longer than an average six seconds per unit. Lack of productivity will force them to reconsider their position when the EU is a market of 500 million customers.

It is essential that a customs union agreement is reached to avoid major disruptions to both imports and exports before the "Brexit" event itself is reached. Any lack of move towards an EFTA deal, let alone perhaps EEA membership which will not mean political union but will require free movement of workers, will severely affect the industry and has the potential to cause quite drastic attrition.

27 April 2017
Most of the British industry is foreign-owned and it relies heavily on exports to the EU particularly, which in turn determines the fate of hundreds of thousands of jobs.

Nissan alone have stated that any delays in their supply chain will cause business to become unproductive if those delays are longer than an average six seconds per unit. Lack of productivity will force them to reconsider their position when the EU is a market of 500 million customers.

It is essential that a customs union agreement is reached to avoid major disruptions to both imports and exports before the "Brexit" event itself is reached. Any lack of move towards an EFTA deal, let alone perhaps EEA membership which will not mean political union but will require free movement of workers, will severely affect the industry and has the potential to cause quite drastic attrition.

27 April 2017
Straff, true nobody knows what will happen when we leave, but we know what would happen if we stayed - the industry would continue to employ thousands and thousands of people. Let's roll the dice with and see what happens... as long as you're alright that's all that matters eh?

27 April 2017
......must do better.......
Steam cars are due a revival.

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