Auto industry Brexit warning

Chiefs from 23 auto business associations have predicted that a no-deal Brexit would have a ‘seismic’ impact on making cars in Europe.

The chiefs from 23 auto business associations across Europe joined forces to caution against a no-deal exit from the EU by Britain, where BMW, Peugeot and Nissan have factories.

Automaker supply chains cross the English Channel constantly and Britain is the destination of around 10% of vehicles assembled on the continent, according to industry data quoted by Automotive Logistics.

“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 joint statement said.

A chaotic Brexit would land a “severe” blow against the industry’s just-in-time supply chains that stretch across international borders and depend on zero administrative hassle, the associations warned.

“The EU and UK automotive industries need frictionless trade and would be harmed significantly by additional duties and administrative burden on automotive parts and vehicles,” said Bernhard Mattes, the head of Germany’s auto lobby VDA.

“Consequently, the UK and the EU should undertake all necessary steps to avoid a no-deal Brexit,” he said.

Britain’s largely foreign-owned car sector is already reeling from Brexit shocks, with French carmaker PSA warning in July that it could shut down a key plant in northwest England if it becomes unprofitable.

Carmakers are also slamming the brakes on investment in Britain, which fell 70 percent to £90 million ($109 million, 98 million euros) in the six months to June, the UK’s Society of Motor Manufacturers and Traders said in July.

The Society of Motor Manufacturers & Traders (SMMT) has also warned that the cost to auto companies of one minute of stopped production time in Britain would amount to €54,700 (£50,000).