European automotive industry unites against ‘no deal’

The European automotive industry has presented a united front on Brexit, with 23 leading organisations locking arms against no-deal.

The lead 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 21 national associations, including the Committee of French Automobile Manufacturers (CCFA), the German Association of the Automotive Industry (VDA), and the Society of Motor Manufacturers and Traders (SMMT), joined forces to stress 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 contributors to growth and wealth, producing 19.1 million vehicles a year and employing 13.8 million people across the wider sector – one in 16 of the EU’s workforce. Fundamental to this has been the deeply integrated nature of the industry, which has sought to maximise single market and customs union benefits to the advantage of businesses EU-wide.

European industry chiefs warned that the repercussions of ‘no deal’ to this vital sector will be severe. 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 on both sides of the Channel. 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 (£50,000). 

Meanwhile, WTO tariffs on cars and vans could add €5.7bn (£5bn) to the collective EU-UK auto trade bill, raising prices for customers if manufacturers cannot absorb the additional cost. Automotive manufacturers believe that such disruption and cost must be avoided, and that all effort should be made to deliver an orderly withdrawal of the UK from the EU.

Mike Hawes, SMMT chief executive, said, ‘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.

‘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.’