Leaders from the European automotive industry have warned of the catastrophic consequences a ‘no-deal’ Brexit would have on the motor market.
The lead organisations representing vehicle and parts manufacturers in the EU, the European Automobile Manufacturers Associations (ACEA) and European Association of Automotive Suppliers (CLEPA), have joined forces with 21 national associations, including the Society of Motor Manufacturers and Traders (SMMT), the Committee of French Automobile Manufacturers (CCFA), and the German Association of the Automotive Industry (VDA), to stress the impact of a no-deal Brexit on the industry.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
“Brexit is not just a British problem,” said Christian Peugeot, president of the CCFA. “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.”
The EU’s automotive industry produces 19.1m vehicles annually, employing 13.8m people – representing one in 16 of the EU’s workforce. Fundamental to this success, according to the joint statement, is the integrated nature of the industry. The interwoven nature of the market has sought to maximise single market and customs union benefits to the advantage of businesses throughout the EU, and no-deal Brexit threatens that ecosystem, the associations warned.
Should the UK leave the EU without a deal, the industry leaders believe there will be a ‘seismic shift’ in trading conditions, with billions of euros of tariffs threatening to impact consumer choice and affordability for both the UK and the EU.
The statement also warns that the end of barrier-free trade could bring harmful disruption to the industry’s operating model – with the cost of one minute of production stoppage in the UK amounting to £50,000. Elsewhere, WTO tariffs on vehicles could add £5bn to the EU-UK auto trade bill, raising the price for customers if manufacturers are unable to absorb the additional cost.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataErik Jonnaert, secretary general of the ACEA, stressed the importance of barrier-free trade in the European auto industry, which operates some 230 assembly and production plants throughout 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.”
Mike Hawes, chief executive of the SMMT, added: “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.”
