Auto industry could face £5bn tariffs due to ‘no-deal’ Brexit
20 September 2018
The Society of Motor Manufacturers and Traders (SMMT) has claimed that a ‘no-deal and the resulting tariffs on light vehicles alone would add £5 billion to the collective EU-UK auto trade bill.’
It claims that import tariffs would push up the cost of UK-built cars sold in the EU by an average £2,700 and that of light commercial vehicles by £2,000, impacting demand, profitability and jobs. UK buyers of EU cars or vans would also be faced with additional costs – an average of £1500 per car, £1700 per van – if manufacturers or dealers were unable to absorb the costs.
Mike Hawes, SMMT Chief Executive, said: ‘Tariffs alone should be enough to focus minds on sealing a withdrawal agreement between the EU and UK but the potential impact of ‘no-deal’ means the stakes for the automotive sector are far higher.
The SMMT previously asked the UK government to seek an arrangement that would maintain membership of the EU single market and customs union until a final agreement on a new relationship is negotiated and implemented.
The UK boasts the EU’s second largest new car market – worth some £29 billion to EU manufacturers every year. It turns over £82 billion, supports 856,000 jobs (186,000 in manufacturing) and is responsible for 11% of EU auto manufacturing R&D spend.
Hawes continued, saying: ‘Without a deal, there can be no transition period and the complex issues surrounding tariffs and trade, customs, regulation and access to talent will remain unresolved. Our industry is deeply integrated across both sides of the Channel so we look to negotiators to recognise the needs of the whole European automotive industry and act swiftly to avoid disruption and damage to one of our most valuable shared economic assets.”
Late last year UK car industry executives warned Prime Minister Theresa May that they need ‘urgent clarity’ over future trading relations with the European Union after Brexit if they are to continue investing in the country’s automotive market.