Britain's Auto Industry Foresees Doom Without EU Deal Before Hard Brexit

Matt Posky
by Matt Posky
britains auto industry foresees doom without eu deal before hard brexit

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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  • Starbird2005 Starbird2005 on Aug 04, 2018

    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.

  • Cicero1 Cicero1 on Aug 06, 2018

    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."

    • Astigmatism Astigmatism on Aug 06, 2018

      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.

  • Denis Jeep have other cars?!?
  • Darren Mertz In 2000, after reading the glowing reviews from c/d in 1998, I decided that was the car for me (yep, it took me 2 years to make up my mind). I found a 1999 with 24k on the clock at a local Volvo dealership. I think the salesman was more impressed with it than I was. It was everything I had hoped for. Comfortable, stylish, roomy, refined, efficient, flexible, ... I can't think of more superlatives right now but there are likely more. I had that car until just last year at this time. A red light runner t-boned me and my partner who was in the passenger seat. The cops estimate the other driver hit us at about 50 mph - on a city street. My partner wasn't visibly injured (when the seat air bag went off it shoved him out of the way of the intruding car) but his hip was rather tweaked. My car, though, was gone. I cried like a baby when they towed it away. I ruminated for months trying to decide how to replace it. Luckily, we had my 1998 SAAB 9000 as a spare car to use. I decided early on that there would be no new car considered. I loathe touch screens. I'm also not a fan of climate control. Months went by. I decided to keep looking for another B5 Passat. As the author wrote, the B5.5 just looked 'over done'. October this past year I found my Cinderella slipper - an early 2001. Same silver color. Same black leather interior. Same 1.8T engine. Same 5 speed manual transmission. I was happier than a pig in sh!t. But a little sad also. I had replaced my baby. But life goes on. I drive it every day to work which takes me over some rather twisty freeway ramps. I love the light snarel as I charge up some steep hills on my way home. So, I'm a dyed-in-the-wool Passat guy.
  • Paul Mezhir As awful as the styling was on these cars, they were beautifully assembled and extremely well finished for the day. The doors closed solidly, the ride was extremely quiet and the absence of squeaks and rattles was commendable. As for styling? Everything's beautiful in it's own way.....except for the VI's proportions were just odd: the passenger compartment and wheelbase seemed to be way too short, especially compared to the VI sedan. Even the short-lived Town Coupe had much better proportions. None of the fox-body Lincolns could compare to the beautiful proportions of the Mark was the epitome of long, low, sleek and elegant. The proportions were just about perfect from every angle.
  • ToolGuy Silhouetting yourself on a ridge like that is an excellent way to get yourself shot ( Skylining)."Don't you know there's a special military operation on?"
  • ToolGuy When Farley says “like the Millennium Falcon” he means "fully updatable" and "constantly improving" -- it's right there in the Car and Driver article (and makes perfect sense).