European motor industry warns of Brexit harm

In a statement issued on Monday, the European Automobile Manufacturers' Association, the European Association of Automotive Suppliers and 17 national groups said a no-deal scenario would cause "irreversible damage" to an industry that employs almost 14 million people across the continent - about 6% of the total workforce.The industry is regarded as one of the EU’s biggest success stories, contributing to both growth and wealth across the continent, and producing more than 19 million vehicles a year.In a statement issued across the EU, the organisations said, "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 end of barrier-free trade could bring harmful disruption to the industry's just-in-time operating model, with the cost of just one minute of production stoppage in the UK alone amounting to €54,700."

No-deal Brexit would cause irreversible and severe damage

Mike Hawes, chief executive of the UK's Society of Motor Manufacturers and Traders, 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."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."However, Prime Minister Boris Johnson has threatened to leave the EU with or without a deal and, were it to be the latter, the tariff-free trade with a market that takes 57% of British car exports would come to an end.Such a no-deal Brexit could also snarl up the cross-Europe supply chains that carmakers depend on, disrupt production and erode profit margins that are already wafer thin.

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Brexit: everything has to be done to maintain free movement

Bernhard Mattes, president of the German Association of the Automotive Industry, 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."

Production of Vauxhall and Opel Astra in the UK depends on Brexit

Meanwhile, French carmaker PSA has warned that continued production of the Vauxhall and Opel Astra in the United Kingdom depends on the country's terms of trade with the EU following Brexit. The Astra is the only model currently produced at the group's factory near Liverpool.Christian Peugeot, president of the Committee of French Automobile Manufacturers, added: "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."

Will the UK government's promise of £108 million be enough to compensate in the event of the predicted no-deal Brexit disaster?

A spokesman for the UK's Business Department in London, said, "We will be leaving the EU on October 31, and it is our preference to do so with a new deal that is in the interests of both our businesses and citizens."The UK automotive industry remains one of our great success stories, at the forefront of designing and manufacturing cutting-edge vehicles that are exported internationally."We have turbocharged preparations for Brexit across all sectors, including automotive, with £108 million of funding to promote and support businesses to ensure they are ready for Brexit and can take advantage of the opportunities of our future outside of the EU."

For more news and views, visit our dedicated Brexit section.

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