By on August 2, 2018

british-leyland-mini

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), Britain’s main industry group, claims automakers were becoming increasingly concerned with the nation’s departure from the European Union. Prime Minister Theresa May wants a solution that would allow Britain to maintain strong trade ties with the EU while allowing her country to maintain autonomy, but hasn’t found much success.

U.S. President Donald Trump claims a deal with the United Kingdom is absolutely possible, saying the relationship between the two countries is “the highest level of special” late last month. But he also noted that the EU would complicated matters if Britain adhered to its trade laws after Brexit, which is just eight months away.

The European Union doesn’t seem to want to let Britain go, and is nudging the country to stick to its rules by not venturing out to make its own trade arrangements. Critics say this effectively makes the island nation a “vassal state” to the EU, completely defeating the point of Brexit. However, many are fearful that leaving the union and ignoring its mandates could have negative repercussions in the long term — especially in regard to finance and trade. 

Hawes said the earlier meeting between Trump and European Commission President Jean-Claude Juncker on trade was more encouraging, even though they didn’t expand upon the elimination of automotive tariffs (which Trump previously suggested for European car imports). However, there is no reason to think the U.S. would be adverse to making special exceptions for Britain if it could leave the EU in earnest and cut deals of its own.

“What we would say is that any increase in tariffs would be significant and would be damaging both to the U.S. and in Europe, and I include [Britain] in Europe when it comes to exports,” Hawes said.

Despite the United States being a sizable market, the home front is the bigger issue. Automotive production accounts for almost a tenth of British manufacturing output and a significant portion of those vehicles stay within the EU. If no deal is reached, those autos would be subject to the union’s import tariffs of 10 percent.

“No deal … is just not an option. It would be seriously damaging to the industry not just in the UK but in Europe as well,” Hawes said during SMMT’s mid-year update on British car production.

According to Reuters, British car output in the first six months of 2018 fell by an annual 3.3 percent with disappointing domestic demand canceling out stronger export volume. In June, overall production fell 5.5 percent compared with June 2017, while export markets rose by 6.0 percent.

Hawes said the domestic slump was attributable largely to changes in model cycles and manufacturers getting ready for the stringent new emission standards. He estimates production will recover in the coming months.

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13 Comments on “Britain’s Auto Industry Foresees Doom Without EU Deal Before Hard Brexit...”


  • avatar
    volvo

    I don’t really have a knowledgeable opinion on Brexit but think a doomsday scenario unlikely

    Just looked at Wikipedia and Society of Motor Manufacturers and Traders (British auto manufacturers trade group) on British Auto Industry

    98% of production in England is under ownership of BMW, Opel AG, Toyota, Honda, VW and Tata motors.

    Rough figures are 1.700,000 cars produced 2017. 15,000 produced by british owned companies.

    While possible that these foreign owned companies would move production out of England I think it is unlikely. Also being non british companies I am not sure their motivations for this gloom and doom have what is best for britain as top priority.

    • 0 avatar
      Astigmatism

      They likely won’t move out of Britain any time soon – they’re too committed to British investments they’ve made over the past decade or two – but they will certainly relocate future development to the continent. Why wouldn’t they? If you can build a factory in Country A and pay no tariffs on what you produce, or Country B and pay a 10% tariff, you’d choose Country B ten times out of ten.

      • 0 avatar
        Tstag

        Any components that a U.K. manufacturer takes out of the U.K. for work to be carried out in the EU will be subject to potential tarrifs. This could make the total cost of a U.K. made car very expensive. Personally I think there would be a drift of car makers out of the U.K. over time. If we went that far I think there may well be a change of government who would simply start using tax payer money to try and stop the bleed. THe whole thing Ian a waste of time and brain power.

    • 0 avatar
      Guitar man

      That’s not how the EU works. You have to beg permission to export to the EU and then they impose crushingly small quotas. Australia for instance, was limited to selling no more than 100 of any model per year.

      Toyota, Honda and Nissan have already stated they will close UK production without EU access. PSA and Tata have stated they will scale down production without significant government grants. BMW has just announced a new plant in Slovakia making the engines currently made in the UK.

  • avatar
    TrailerTrash

    The entire EU plan was a design for failure.
    Trade and money aside, once the unelected brussels elite started in on social laws, the entire plan was doomed.

    There is no way all of these different cultures would blend together and be ruled by officers they had no control over.

    and the doomsday cries are just like we hear here in the United States. From Global Warming to Trump destroying the planet with WW#, the powerful try to herd the cows with headline horrors.

    Not anymore.

    • 0 avatar
      Astigmatism

      “and the doomsday cries are just like we hear here in the United States.”

      Oddly enough, I haven’t heard a lot of my European friends crying about Jade Helm or flocking to theaters to watch Dinesh D’Souza’s latest ‘Juncker 2020’ or talking about how their next MEP election is the “United 93 MEP Election,” but I’m sure they’ll catch up to us soon enough.

    • 0 avatar
      Ol Shel

      Increasingly, you can say that about our union of states.

      And don’t forget your QAnon, Pizzagate, and Sandy Hook ‘hoax’, too. All part of the massive conspiracy to ‘trick’ you into giving a rip about the planet and its inhabitants…

      • 0 avatar
        Lockstops

        I dunno. Seems to me that Americans know a hell of a lot about Star Wars.

        And they know how to buy Teslas and Android phones which means that they are tech world visionaries and old industry disruptors, right?

    • 0 avatar
      ect

      The European Common Market project that has evolved into the EU has a been a huge economic and political success story. Which is precisely why it has expanded from the original 6 members to 28 today, with more countries wanting to join. The UK has been a beneficiary of this success since it joined.

      Brexit,on the other hand, will fond its way into the Thesaurus as a synonym for stupidity, as the UK has opted to substantially reduce its standard of living. The departure of key manufacturing assets (over time, of course) is one part of this, as will be the growth of Frankfurt as the key European financial centre in place of London.

  • avatar
    Zackman

    I didn’t think Britain had an auto industry anymore, at least not a domestic one, owned by a British company that manufactures cars in Britain.

    The U.S. is getting closer to that scenario.

  • avatar
    starbird2005

    What’s often overlooked is something like 80% of all formula one cars are made in the UK. There’s a thriving small car industry outside of the big ones.

    Brexit is one of the most stupid decisions ever made by a British government. Even the Brexiters like Rees-Mogg is moving his money out (over to Ireland) and saying it will take 50 years before the UK will see any benefit from leaving (but he’s still in favor because the disaster might make him Prime Minister). The whole thing has been devastating to the UK economy and its getting worse with the latest estimates being that they will crash out without a deal with odds of 1 in 3. Insane.

  • avatar
    cicero1

    More lies from globalists and soros, et al. The facts: Britain is thriving post brexit:

    “British trade exports have defied expectations by hitting a record high of £616 billion as international trade secretary Liam Fox works on securing post-Brexit bilateral agreements with some of the world’s largest economies.

    Official figures showed that 55 percent of exports were to nations outside of the European Union (EU) in 2017, with almost a fifth of sales going to the United States, according to the Department for International Trade, established following Britain’s vote to Leave the European Union.

    Overall, exports of goods rose by 13 percent to £339 billion, with services increasing to £277 billion (seven percent).

    The figures also revealed that the trade deficit between the United Kingdom and non-EU countries was shrinking, decreasing by £5 billion compared to the year before, amounting £25.8 billion.”

    • 0 avatar
      Astigmatism

      You realize Brexit hasn’t actually happened yet, right? Meanwhile, in the reality-based community, the pound fell to its lowest point in eleven months today after Liam Fox warned that a no-deal Brexit is now a 60:40 odds-on likelihood.


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