A no-deal Brexit will have a "severe" impact on the automotive sector, raising prices for customers and disrupting the industry’s just-in-time operating model, EU automotive organisations warned this week.
In an unprecedented joint statement, 23 automotive associations from across the EU warned of the "devastating" impact a no-deal Brexit will have on the sector.
It 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.”
It warned that ending free trade could deliver “harmful disruption” to the industry’s just-in-time operating model, noting that the cost of one minute of production stoppage in the UK alone amounts to £50,000.
It added that WTO tariffs would add billions of pounds to the collective EU-UK auto trade bill, “raising prices for customers if manufacturers cannot absorb the additional cost".
The warning comes as the UK government mulls plans to impose post-Brexit import tariffs on new trucks which could be as high as 22%.
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Erik Jonnaert, secretary general of ACEA, which represents companies such as DAF, Daimler, Volvo and Iveco, 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.
“Even the repeated need to plan and implement contingency measures to deal with a disorderly Brexit is highly disruptive to our members. The European automobile industry therefore calls for all sides to rule out a ‘no-deal’ scenario as soon as possible.”
Mike Hawes, SMMT Chief Executive, 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.”
The 23 signatories include the German Association of the Automotive Industry, the Spanish Association of Car and Truck Manufacturers, the Swedish Association of Automobile Manufacturers and Importers and the French Association of the Automotive Industry.
