The prospect of no-deal has been described as 'devastating' to the industry.
Groups from across the bloc have joined the UK's Society of Motor Manufacturers and Traders (SMMT) by asking the government and EU to take a no-deal Brexit out of the equation. It’s a combined force of organisations that includes the European Automobile Manufacturers Association (ACEA) and European Association of Automotive Suppliers (CLEPA), as well as 21 national associations, such as Committee of French Automobile Manufacturers (CCFA) and the German Association of the Automotive Industry (VDA).
Together, the 23 organisations warned of “severe” repercussions of a no-deal Brexit, with the prospect of tariffs and trade barriers threatening the industry and consumers with huge price hikes. For example, the SMMT says border delays could lead to production stoppages that cost £50,000 per minute.
Mike Hawes, the SMMT’s chief executive, said a no-deal Brexit would be “devastating” for the country’s car industry, causing “severe damage” to a sector that has become a large part of the EU’s economy.
“European automotive is deeply integrated and the benefits of free and frictionless trade have helped our sector become one of Europe’s most valuable assets, delivering billions to economies and supporting millions of livelihoods across the EU,” he said. “A ‘no deal’ Brexit would have an immediate and devastating impact on the industry, undermining competitiveness and causing irreversible and severe damage. UK and EU negotiators have a responsibility to work together to agree a deal or risk destroying this vital pillar of our economies.”
Meanwhile Bernhard Mattes, president of the German VDA, said the UK car industry was a vital part of the German automotive sector, and one of the country’s biggest customers.
“We regret Brexit,” he said. “The United Kingdom is a fully integrated player in the value chain of the German automotive Industry. More than 100 production facilities, as well as research and development located in the UK, prove our commitment to the UK market as a number-one market in the EU. In the view of the German automotive industry, therefore, everything has to be done to maintain the free movement of goods, of services, the freedom of capital and the freedom of movement for workers between the UK and the EU. At the same time, we acknowledge that the internal market and the cohesion of EU27 are a priority and a pre-condition.”
And Erik Jonnaert, ACEA secretary-general, said the whole of the European car industry was depending on ongoing free trade.
“Barrier-free trade is crucial for the continued success of the deeply integrated European auto industry, which operates some 230 assembly and production plants right across the EU,” he said. “Brexit will have a significant negative impact on the automotive sector and a ‘no deal’ Brexit would greatly exacerbate those consequences, causing massive disruptions to an industry which is so vital to Europe’s economy. Even the repeated need to plan and implement contingency measures to deal with a disorderly Brexit is highly disruptive to our members. The European automobile industry therefore calls for all sides to rule out a no-deal scenario as soon as possible.”