Representative from the industry bodies behind Europe’s automotive manufacturing sector have united in their efforts to deter the UK and EU from allowing a ‘no deal’ Brexit to go ahead.
Society of Motor Manufacturers and Traders (SMMT) chief executive, Mike Hawes, has joined 21 colleagues from similar trade bodies across the EU in signing a joint statement to express joint concerns shared by OEMs and manufacturing operations across the region.
The group said that a ‘no deal’ Brexit 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”.
In his contribution to the open letter, Hawes 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.
He added: “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.”
Speaking at the Frankfurt Motor Show earlier this month the bosses of BMW and Jaguar Land Rover (JLR) both gave an insight into the possible repercussions of Brexit on their UK manufacturing plants.
BMW said its workers may have to go unpaid for a more than three weeks during an enforced shutdown of its Oxford manufacturing plant after Britain’s departure from the EU, stating that it could not afford to pay its 4,000 workers at the plant for another period of leave enforced by Brexit after it re-scheduled its month-long summer shut-down period to start on March 29 in an effort to mitigate the impact of the previous deadline.
BMW’s chief financial officer Nicolas Peter told The Guardian: “We are not capable of a second holiday period in 2019 so this could have a financial impact on our colleagues working in Oxford.”
Jaguar Land Rover chief executive, Dr Ralf Speth, meanwhile, told Sky News that its plants were unable to stockpile parts to maintain its production following a ‘no deal’ departure due to the sheer volume of components required each day.
The European Automobile Manufacturers Association (ACEA) and European Association of Automotive Suppliers (CLEPA) were among those who have joined forces to stress the impact a ‘no deal’ Brexit would have on one of Europe’s most valuable economic assets this week.
Comments from the leaders of the various industry organisations said that Europe’s automotive industry is one of the region’s biggest success stories, 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.
Just one minute of production stoppage in the UK as the result of an end of barrier-free trade would see the cost of just alone amounting to €54,700 (£50,000), the group 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.
Christian Peugeot, CCFA president, said: “Brexit is not just a British problem, we are all concerned in the European automotive industry, and even further.
“Be it as exporters to the UK market or producers locally, which we are both, we will inevitably be negatively affected.”
VDA president, Bernhard Mattes, said: “We regret Brexit. 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.
“The EU and UK automotive industry need frictionless trade and would be harmed significantly by additional duties and administrative burden on automotive parts and vehicles.
“Consequently, the UK and the EU should undertake all necessary steps to avoid a ‘no deal’ Brexit.”