News : European car industry leaders torpedo ‘no-deal’ Brexit

UK car industry chiefs have joined forces with the European industry to issue dire warnings about the effects of a ‘no-deal’ Brexit on British car manufacturing. As much as £50,000 could be lost through a single minute’s stoppage – a serious side effect of components failing to be delivered to production lines. 

With just over one month to go before the UK is due to leave the EU, senior representatives of the European automotive industry made a united call for the UK and the EU to avoid a ‘no-deal’ Brexit. UK car manufacturing chiefs as well as organisations representing vehicle and parts manufacturers across the EU have joined forces to condemn a ‘no-deal’ Brexit and underline the consequences it would have on one of Europe’s most valuable economic assets.

The automotive industry contributes hugely to the UK and the EU as a whole, producing 19.1 million vehicles a year and employing 13.8 million people. Fundamental to this success is the deeply integrated nature of the industry, which uses the single market and frictionless border crossings to speed up production and increase efficiency.

According to European industry chiefs, the UK’s departure from the EU without a deal would seriously hamper trading conditions, with tariffs threatening to raise prices on both sides of the Channel. The imposition of border checks would harm the industry’s just-in-time operating model, which according to the SMMT, could add €5.7 billion (£5 billion) to the collective EU-UK auto trade bill. Carmakers 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 that affects trading as little as possible.

Frictionless trade needed between the EU and UK

Ralph Speth, CEO of Jaguar Land Rover, said: ‘In order to produce vehicles we need in the UK between 25-30 million parts a day, delivered on time, in order to assemble a vehicle, and if it’s guaranteed we have a frictionless trade… then we can continue production. But if we don’t have the parts we need we will not produce the vehicle. And that will be an issue not only for us but also for the smaller suppliers.’

Stephen Norman, Managing Director of Vauxhall, told CAR magazine: ‘September 2019 is the last normal month for the UK market. If we get a hard Brexit, we will be entering uncertain territory. I do not know what the fourth quarter will look like – I’m trying to get my full year by the end of September. In the event of a hard Brexit the new car market could fall by between 20-25%. It could be higher – nobody knows.’

This view is echoed on the other side of the Channel, where a number of big hitters stated their countries’ position. Bernhard Mattes, President of the German Association of the Automobile Industry (VDA), said: ‘We regret Brexit. The UK has more than 100 production sites as well as research and development facilities. In the view of the German automotive industry, 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.’

Erik Jonnaert, Secretary General of the European Automobile Manufacturers Association (ACEA), said: ‘Barrier-free trade is crucial for the continued success of the deeply integrated European auto industry, which operates some 230 assembly and production plants right across the EU. Brexit will have a significant negative impact on the automotive sector and a ‘no-deal’ Brexit would greatly exacerbate those consequences, causing massive disruptions to an industry which is so vital to Europe’s economy. The European automobile industry calls for all sides to rule out a no-deal scenario as soon as possible.’

Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT) in the UK, concluded: ‘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 car 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.’

A ‘no-deal’ Brexit will cost car buyers dearly

With sales and production down in the UK consistently throughout 2019, the chilling effects of Brexit are already hitting the UK motor industry. Parliament has passed the European Union (Withdrawal) (No.2) Act 2019 which puts the Government under a legal obligation to secure a further extension pursuant to Article 50(3) of the Treaty on European Union beyond the 31 October if a deal cannot be concluded at the European Council meeting on 17 and 18 October.

However, if the Government does not conclude a deal and, as has been suggested, finds a way around the Act, the UK will leave the European Union on a ‘no-deal’ basis on 31 October – in those circumstances, the UK car industry is set to lose £70 million a day (based on a five-day working week) because of delays to the arrival of components. Moreover, if World Trade Organisation tariffs are imposed because of no deal, the annual cost to the car industry could be as much as £5bn per year – if manufacturers cannot absorb the additional cost, much of that is likely to be passed on to consumers.

What long-term impact all of this will have on an already embattled UK Automotive sector remains to be seen…

Keith Adams

Editor and creator AROnline at AROnline
Created www.austin-rover.co.uk in 2001 and built it up to become the world's foremost reference source for all things BMC, Leyland and Rover Group, before renaming it AROnline in 2007.

Is the Editor of the Parkers website and price guide, formerly editor of Classic Car Weekly, and launch editor/creator of Modern Classics magazine. Has contributed to various motoring titles including Octane, Practical Classics, Evo, Honest John, CAR magazine, Autocar, Pistonheads, Diesel Car, Practical Performance Car, Performance French Car, Car Mechanics, Jaguar World Monthly, MG Enthusiast, Modern MINI, Practical Classics, Fifth Gear Website, Radio 4, and the the Motoring Independent...

Likes 'conditionally challenged' motors and taking them on unfeasible adventures all across Europe.
Keith Adams

40 Comments

  1. “As much as £50,000 could be lost through a single minute’s stoppage.” Where is Red Robbo when we need him? Now we have Red, White and Blue Boris.

  2. More fear mongering from a group of people who as a whole treat staff and suppliers very poorly and are used to having their own way in a protectionist system.

    • Sounds more like the sort of people who know how to play people like you like a fiddle, unless you are already one of them, just check your bank balance, including off-shore accounts.

  3. Even if only a small portion of these fears are realised – we will lose – the EU will lose – and the consumer will pay for years to come. For goodness sake someone pull the plug on this nonsense!

  4. None of this sorry saga should come as a surprise. You don’t need to be an industry expert to realize the implications, just a bit of common sense should do. Seems to be in short supply among the Daily Fail and Scum readers I know of.
    Further damage is going to be done, no matter what the political outcome, we can only hope for the ‘least worst’ situation that means it can be sorted as quickly as possible.

  5. The UK car industry is part of frictionless single market supply chains. Car plants are based here because those plants have access to EU markets. Companies in the EU can buy UK automotive parts with minimal red tape because we are EU members.

    Alas the hardcore leavers are fanatics and I don’t think they care about the damage they and their cause are doing and will do. They are beyond the reach of rational argument.

  6. What utter rubbish. Do they really think we still fall for this kind of thing?
    it’s just co-ordinated propaganda.
    JLR- TATA, MD is German. Vauxhall- owned by French PSA. The President of the German Auto Industry association- do you think he’s going to be pro-Brexit? European Automobile Manufacturers Association?
    Brexit is a chance to build up the car industry in this country again- it has been wrecked since 1972 when we joined the so-called ‘frictionless trade bloc’
    The bosses of the ports at Dover and Calais have confirmed they are ready for any kind of Brexit, and that no extra delays are anticipated. Other ports have made similar prparations.
    A large percentage of the parts for cars these days come from Asia, which in case you haven’t noticed, is OUTSIDE THE EU.

    • Still fooling yourself that the world of “I’m Alright Jack” can still exist, even though it was rotting fast even before 1972, ironically mostly because of Asian countries making better quality goods cheaper than out industries could, thanks to the lazy & complacent attitude right through them from unskilled labourers to management.

      By the time trade deals have been agreed there won’t be any car industry left to take advantage of them.

      • When coiour televisions started to take off in popularity in the early seventies, Sony produced a colour television that apart from being 30% cheaper than its British rivals, was far more reliable due to being totally transistorised, used a flat screen for a far better picture and didn’t look like a radiogram with a screen. No wonder those that could afford to buy rather than rent were heading to their local Sony Centre and other Japanese manufacturers, offering generally reliable and keenly priced products, began to appear. Sounds very familiar to what happened to the car industry.

        • Very true, it didn’t help that the British TV industry was geared up to supply the rental trade with sets that were basic but easy to repair for a few years, then sold to a cottage industry of independent re-conditioners who would either sell them on or rent them where there wasn’t competition from the rental chains.

          This balance was broken not just by imports, but by credit deals becoming easier to sign up to during the 1970s.

          The British industry also under-estimated the growth of colour TV, struggling to keep up with demand, which allowed imports to gain traction, & not bothering with portables until it was too late, which also imports to fill the void.

          the Japanese brands seemed geared towards selling directly to the public & making them last at least a decade without any major problems.

          I’ve got 1980s Toshiba sets that work almost as well as they did when they were new.

          • The cost of a new colour television was too high for most working class viewers until the late seventies, and also some were unreliable and expensive to fix, so rental companies who were mostly owned by British manufacturers filled the gap. Also reconditioned older sets were a fact of life for millions who couldn’t afford to buy or afford the rental payments on new sets. We had to put up with these elderly sets and one when blew up in 1985, took the plunge and bought a new JVC set from the Co Op that lasted 12 years without a single problem.

    • If that’s the case they arrive here on terms negotiated via our membership of the EU. If we leave without a deal – the position favoured by the brainless – this will be on WTO, a safety net that no proper country trades on until we negotiate alternative deals – deals that will take several years to negotiate and deals we will be negotiating from the position of a small, de-industrialised country of 60 million rather than part of a continent of half a billion.

    • Do you seriously believe, a genuine British car industry will resurrect post brexit? Experts say that in the long term only a handful of the current manufacturers will survive worldwide. Who should invest the enormous sums needed to start a new one which has no chance to compete with the ones already existing.

      You seem to underestimate the complexity of constructing and building motor cars these days, not to mention the necessary efforts for marketing a new brand and establishing a sufficient dealer network.
      But possibly your Mr. Rees Mogg is willing to contribute to the reeincarnation of f. ex. Morris?

      And why on earth do you make the EU responsible for the death of the once prosperous British motor industry? Sorry, but all this was home made. Nobody in Brussels dictated BL´s desastrous model policy of the late 70´s and early 80´s, nobody in Brussels asked BL to deliver the doubtful quality which made the cars uncompetitive and wasn´t it Mrs. Thatcher who did her best to ruin British manufacturing in favour of the so called finance industry which makes the UK so vulnerable today?

      My name suggests I am German, but I spent many wonderful years in GB and I still admire cars like the original Mini, Jag´s of the 60`s and early 70´s, Rover P6 etc. But I am totally fed up and almost depressed about this utterly irrational attitude towards the EU.

  7. Read the BMC/British Leyland history elsewhere on this site where they desperately wanted tariff free trade with Europe and set up factories in Belgium and worked with Innocenti and Authi to enable production within the Common Market. I can’t quite understand why many Brexiters were around in the early 1970’s but still want to go back to those times. We have never fully been in the EU, eg in the Euro. Place your bets on Jeremy Hunt shortly becoming PM and Jacob Rees Mogg quitting as a QC….

  8. As an innocent bystander I have look your Parliament shambolic sittings and UK political mess when brexit day and so called dead end with out deal comes closer. You have had enough time. Now, it’s finally come clear even Boris, EU does not need United Kingdom. Euro area has the capacity to go on without UK, but it takes two years to brits to understand it.

  9. There is no one more ‘true Brit’ than me. I read British history – mainly company history – all the time. I would love to go back to the British Bulldog days – frankly, having lived through the 50’s and onwards I would love to be a time traveller and go back to the 50’s where Britain was a great exporter, we were all as poor as each other, an ice cream was 6 pence and Hillman’s new ‘gay look’ coloured Minx’s were the brightest thing around….but we are where are!
    The world is a vastly different place – and global and European! No amount of romantic rose tinted spectacles are going to change the world as it is. Trading is already difficult enough without building new barriers, tariffs and agrivation.
    The big failing of the U.K. Government – all of them – has been failing to spend millions of pounds educating and promoting the EU – unlike all other countries have done. Therefore, when the voting happened, people based their opinion on all the negatives – the daftest one being ‘we don’t want to be bossed around by Brussels’! The fact that every member state was involved with the decision making – not just the Belgians or the Germans or whoever, was completely lost on these people – and it was not their (our) fault. The government should have done more to make us all aware of how the EU works. I’m not talking about ‘smart’ observers on this site who believe they know all about it – I’m talking about Jo Public (me included) who knows precious little about it, but having lived before we joined and after, and (as a 20 year old) campaigning vociferously against joining in the first place – we cannot turn the clock back without suffering hugely from the lost benefits of our free trading movements.

  10. The real problem, not referred to in any of the comments so far, is that most people in the UK would be perfectly happy to remain in the EU on the same basis that we joined i.e. that it was a free trade area . It was for that which I voted in 1975. What I did not vote for was that the UK should merely be a province in a European federal state. Abandonment by the EU of the objective of “ever closer union” would go a very long way to satisfy most of the people who voted to leave . If that were acknowledged by the faceless bureaucrats who have caused so much of the trouble , it would be a start

    • Brexit or No-Brexitt makes little difference, long-term the UK car makers are intent upon transferring production away from the UK to low wage areas, after Brexit ( if it happens), free of the control of the Eu, we may escape the influence of the German car industry and accept cheaper more reliable Japanese and Korean cars into the UK

    • There is no federal state and there is never likely to be one. Most of the scare stories you read in the press about the EU are made up bulls**t. Boris himself admitted making up some of the scare stories when he was a journalists.

      That the problem with the referendum, most of the electorate know f**k about complex issues, like the EU and trade in general.

      • Bartelbe : I was involved in politics when what has become the EU was still the European Iron and Steel Community, so I have followed its development for too many decades . I am not imagining the “ever closer union” pronouncements, and if you think they did not exist you are, I’m afraid, deluding yourself

  11. Oh, look, the penny finally dropped. I’ve been saying precisely this for years.

    Doesn’t matter now though because if we article 50 we’re screwed and if we don’t we’re still screwed because we’ve burnt so many bridges in the EU it’s unreal.

    There will be hell to pay either way, Europe will positively revel in making the UK citizens life miserable in so many ways because that’s what we’ve done to them since this ridiculous garbage started.

    Congratulations – you did this, you and your little votes. You voted lying cretins into power (for the nth hundred time, a sure sign of collective insanity by the way ) and they gave you a Hobs choice – now you’ll have to live with it – I have to already. If there was another referendum today I bet it’d either be a reversal or very much tighter but makes no matter, the damage is done.

    The excrement has well and truly hit the rotating ventilation device. Old Ted the Ped must be laughing himself sick in Hell.

    You think the 1970s – 1980s were bad? To quote “You never ‘ad it so good”. 1981 is going to look like the Garden of Eden compared with what’s coming.

    To paraphrase. “I’m a lesbian and a cynic, when I’m not kissing girls I’m neutering their brothers, but it also means, unfortunately, I’m usually right”

    Have fun. But don’t come crying to me when it all falls apart and it will. You’re left with two options and both are bad.

    Welcome to the Brexitashi Maru test..

  12. I have never seen anything as pathetic and childish as today’s backbiting in Parliament, which has achieved absolutely nothing. Same as we’ve endured the Marxists festival this week and next week the hard Right’s get together, where the snarling fanatics can have five days screaming abuse at our expense and forget about the real world. Never in my lifetime, and that includes the bitter Winter of Discontent and early Thatcher years, has politics seemed so nasty and polarised, where the middle ground has been abandoned.

  13. “Brexit is a chance to build up the car industry in this country again”

    Curious. Once all the foreign investors have left, who has a few spare billion to start a volume car company?

  14. its very convenient to blame it all on Brexit. The fact is the removal of tariffs by the EU in Japanese cars has more to do with it. Thatcher let the UK owned car industry die and spent a lot of money giving Japanese manufacturers incentives to build cars in the UK as that was the only way they could avoid tariffs. Well guess what they are being removed now so where is the rationale to build Japanese cars in Europe.

    The EU is bankrupt, the ECB has doubled its bond holdings in the last 5 years. The only thing keeping Italy afloat and to a lesser extent Spain and Portugal is the ECB buying bonds that pay negative interest rates because no one else will. Its actually a kind of Euro nationalization by stealth. One day in the not too distant future Italy will default and you will see a rerun of 2008. It will affect the UK in or out but the closer we are to Europe the worse it will be.

    The Euro has been a disaster from day one. Its ruined Greece and saddled several other countries with debt that can never be repaid. The PIGS owe Germany something like 1 trillion Euros in TARGET 2 balances!!

    What amazes me is people still want to be tied to the rotting hulk of Europe but then most people dont understand the first thing about how the world spins and believe everything they read in the Grauniad.

    Oh and Germany is now in recession. For those who use excessive hyperbole about how bad the UK is go and live in Venezuela please.

    • Don’t forget it also means the Japanese market is now tarriff free to sell cars into, or do your brain-washers not want you to know that.

      I bet you can’t name a single country we can trade with to fill the void left by the EU that won’t insist on a cut-throat deal or else say that an EU wide deal is worth the years of negotiating,

      If anything the Euro has been a useful alternative to the US Dollar & Greece’s problems has been due to their rank corruption, cash in hand economy & excess defence spending.

      Remember those who avoid the right wing bloke down the pub papers can see past all the brainwashing the billionaire tax dodgers want to you fall for hook line & sinker.

      You might as well change your name to Stradivarius as you can be played like a fiddle so well.

      With people like you we might be in the same situation as Venezuela.

  15. Once again, the sheer nastiness in politics is sickening people. Also the supporters of Jeremy Corbyn seem to want to dominate any political forum with their snarling hatred and bigoted beliefs, and one even infiltrated a forum on Facebook about nostalgia and started some rant until he was removed. Then I hear the other side of the coin, where I’ve heard comments about Corbyn being assasinated and the n word used to describe Diane Abbot. Hardly the sort of environments where consensus exists.

  16. The EU is rotten. A trading bloc set up to compete with China, Germany now owns Greece. Avail yourselves to Professor of Political Science Mark Blythe, whom can explain it so much more eloquently.

  17. I wonder with the recent news that PSA wants to merge with Fiat Chrysler that the industry could be dominated by a few manufacturers. Apart from BMW and Mercedes, whose huge sales will always mean they’ll remain independent companies, I often wonder what the future holds for smaller independent manufacturers like Subaru, whose cars seem to have become rare over her in recent years.

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