EU car associations caution against ‘no-deal Brexit’

London - Europe’s leading automotive representatives have warned of “catastrophic consequences” of the UK’s withdrawal from the European Union (EU) without a deal – the so-called no-deal Brexit.

With just over one month to go before the departure scheduled for the end of the month, leading organisations representing the automotive industry made a joint call on 22 Sept to avoid ‘no deal’ scenario.

The repercussions of ‘no deal’ to the “deeply integrated” European automotive sector will be severe, warned the statement, published by the UK’s Society of Motor Manufacturers and Traders (SMMT).

“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,” said the statement.

The end of barrier-free trade, the statement argued, could bring “harmful disruption” to the industry’s just-in-time operating model, said the statement adding that the cost of just one minute of production stoppage in the UK alone amounted to €54,700 (£50,000).

WTO tariffs on cars and vans could add another €5.7bn to the collective EU-UK auto trade bill, raising prices for customers if manufacturers cannot absorb the additional cost, SMMT warned.

“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,” the statement added.

The automotive industry is one of the EU’s biggest industries, 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.

“Brexit is not just a British problem, we are all concerned in the European automotive industry, and even further," said Christian Peugeot, president of the Committee of French Automobile Manufacturers (CCFA).

"Be it as exporters to the UK market or producers locally, which we are both, we will inevitably be negatively affected,” he added

Also expressing his regret over Brexit, Bernhard Mattes, president of the German Association of Automotive Industry (VDA) said the UK was 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,” Mattes added.

In this context, he went on to say, “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.”

The 23 Automotive Association signatories include:

ACAROM – Romanian Association of Automobile Builders

ACEA – European Automobile Manufacturers Association

AFIA – Portuguese Manufacturers Association for the Automotive Industry

AIA – Czech Automotive Industry Association

ANFAC – Spanish Association of Car and Truck Manufacturers

ANFIA – Italian Association of the Automobile Industry

AUTIG – Danish Automotive Trade & Industry Federation

BIL SWEDEN – Swedish Association of Automobile Manufacturers and Importers

CCFA – Committee of French Automobile Manufacturers

CLEPA – European Association of Automotive Suppliers

FEBIAC – Belgian Federation of Automobile and Motorcycle Industries

FIEV – French Federation of Vehicle Equipment Industries

FKG – Scandinavian Automotive Supplier Association

FFOE – Austrian Association of the Automotive Industry

ILEA – Luxembourg Automotive Suppliers Association

OSD – Turkish Automotive Manufacturers Association

PFA – French Association of the Automotive Industry

SDCM – Polish Association of Automotive Parts Distributors and Producers

RAI – Dutch Association for Mobility Industry

SMMT – Society of Motor Manufacturers and Traders

SERNAUTO – Spanish Association of Automotive Suppliers

TAYSAD – Automotive Suppliers Association of Turkey

VDA – German Association of the Automotive Industry