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European car industry fears "earthquake" in case of Brexit without agreement

2019-09-23T07:32:14.015Z

The European Association of Automobile Manufacturers warned Sunday night against the consequences of a no deal, estimating at 5.7 billion the cost of customs duties.



The European Association of Automobile Manufacturers warned Sunday night against the consequences of a no deal, estimating at 5.7 billion the cost of customs duties.

The European automotive industry warned Monday against the catastrophic effects of a Brexit without agreement, saying that a "no deal" would be the effect of an "earthquake" on the manufacture of cars in Europe. "The departure of the United Kingdom from the European Union without agreement would trigger an earthquake for commercial conditions, with billions of euros of taxes likely to affect consumer choice on both sides of the Channel," said the Association. Motor Manufacturers Association (ACEA), the subcontractors (CLEPA) and 21 national associations in a joint statement.

"Automotive industries need a smooth trade"

"Brexit is not just a British problem, we are all concerned in the European car industry, and even beyond," said Christian Peugeot, president of the Committee of French Automobile Manufacturers (CCFA), quoted in the press release. A chaotic Brexit would be a "severe blow" to tight supply chains stretching across international borders, the associations warned.

"The automotive industries in the EU and the United Kingdom need a smooth trade and would be severely penalized by taxes and administrative burdens on spare parts and vehicles," said Bernhard Mattes, chairman of the Association of the German Automotive Industry (VDA). "Therefore, the United Kingdom and the European Union should take all necessary measures to avoid a Brexit without agreement," he pleaded.

Already significant consequences

European manufacturers' associations are assessing the additional cost of additional customs duties in the event of a disordered Brexit at some € 5.7 billion. Automotive giants such as German BMW, French PSA and Japanese Nissan currently have factories in Britain, whose future seems compromised in case of a "no deal".

Investment in the UK auto industry has already been a worrying halt in the first half of the year due to Brexit's uncertainties. Between January and June, the new investments announced melted to 90 million pounds (98.2 million euros), a fall of 70%. About 10% of the vehicles assembled on the European continent are exported to Great Britain, according to industry data. The European automotive sector produces 19.1 million vehicles a year and employs 13.8 million people, or 6.1% of the workforce.

Source: europe1

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