No-deal Brexit could add £5 billion to the EU-UK auto trade bill
23/09/2019
In a statement on September 22, organisations representing vehicle and parts manufacturers across the EU, the European Automobile Manufacturers Association (ACEA) and European Association of Automotive Suppliers (CLEPA), as well as 17 national automotive industry associations (including the UK’s Society of Motor Manufacturers and Traders), joined forces to point out the impact a ‘no deal’ Brexit would have on one of Europe’s most valuable economic assets.
The automotive industry is one of the EU’s biggest success stories and contributes to growth and wealth, producing 16.5 million cars a year and employing 13.8 million people. “Fundamental to this has been the deeply integrated nature of the industry,” the statement said, “which has sought to maximise single market and customs union benefits to the advantage of businesses EU-wide.”
It continued by saying the UK’s departure from the EU without a deal would trigger “a seismic shift” in trading conditions, with billions of euros of tariffs threatening to impact consumer choice and affordability. The end of barrier-free trade could bring harmful disruption to the industry’s just-in-time operating model, with the cost of just one minute of production stoppage in the UK alone amounting to €54,700, it said.
Meanwhile, WTO tariffs on cars and vans could add €5.7 billion (£5 billion) to the collective EU-UK auto trade bill, raising prices for customers if manufacturers cannot absorb the additional cost.
Image: Bentley Motors
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