European car manufacturers call for UK and EU to avoid no-deal Brexit

With just over one month until the October Brexit deadline, the European automotive industry has made a united call for the UK and EU to avoid a no-deal Brexit.

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 no-deal 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 have 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.

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 £50,000.

Meanwhile, WTO tariffs on cars and vans could add £5 billion 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, commented: “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.”

European automotive manufacturing is highly integrated, with supply chains that cross multiple countries. No-deal would immediately result in the UK no longer being party to EU trade agreements and preferential arrangements with some 30 countries, including Turkey, South Africa, Canada, Japan and South Korea, and content from UK suppliers would no longer contribute to EU originating content for the purposes of rules of origin.

This could potentially make it harder for European manufacturers to access the preferential terms of agreed EU trade deals. In addition, no-deal would immediately make the EU market smaller, and potentially less attractive to international trade partners.

At this time of intense global competition and technological transformation, EU and UK automotive manufacturers have called for a Brexit outcome that maintains free and frictionless trade and allows them to continue to invest, produce and sell competitively, and that encourages cross-border technological collaboration.

The lead automotive organisations say this will drive future innovation, benefiting consumers, societies and economies right across Europe.

"With so much at stake, it is in the interest of all parties to avoid no-deal and deliver a managed withdrawal of the UK from the EU," the SMMT said.

The 23 Automotive Association signatories include:

• ACAROM – The Romanian Association of Automotive Manufacturers


• 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

SMMT www.smmt.co.uk