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


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

Brussels (AFP)

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.

"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.

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 slow motion -

PSA boss Carlos Tavares warned in July that the builder was ready to close the UK's Ellsmere Port plant and move the business to continental Europe if the Brexit went bad.

At the end of June, PSA had already issued a severe warning warning that it would manufacture its new Astra in this plant in northwestern England only if there is agreement on Brexit.

Premium car maker BMW said in early September that it would shut down its Oxford plant in Oxford for two days around the date set for Brexit, on October 31, illustrating the predictable mess in the sector around that deadline.

And Nissan had announced in March that it would stop producing its Infiniti luxury models in its plant in Sunderland in the north-east of England.

"A Brexit without an agreement would have an immediate and devastating impact on the industry, undermining competitiveness and causing irreversible and severe damage," said Mike Hawes, president of the British Automobile Manufacturers and Vendors Association (SMMT).

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.

© 2019 AFP

Source: france24

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