Brexit, car manufacturers sound the alarm: “No deal to burn 110 billion euros”

Brexit, car manufacturers sound the alarm: “No deal to burn 110 billion euros”

Car manufacturers, playing on both banks of the English Channel, have sounded a clear alarm. If Brexit eventually resulted in no deal between the two partners, namely Great Britain and the European Union, 110 billion euros from business deals would go up in smoke in the next five years. Such event would cause unbearable repercussions on the industry, which in Europe (including islands) accounts, in terms of employment, for one job position out of fifteen. Not to mention, besides that, the industry has been going through a rather complicated period owing to Coronavirus outbreak.

Car manufacturers sound the alarm

Twenty-three industry associations, including EU ACEA, Italian ANFIA and British SMMT have signed a plea. In a nutshell, they plead with parties to avoid No Deal, considering that there are slightly less than 15 weeks left prior to the end of transitional period: there is still time for negotiating then.

“If they did not reach a deal, within December 31st – they pointed out in their letter, as reported by Quattro Ruote – the European Union and the United Kingdom would therefore be compelled to trade according to WTO non-preferential rules”. Which ones? “A 10% tariff imposed on cars and up to 22% duties imposed on vans and lorries. Such tariffs – they continued in the letter –, which are by a great deal higher than low profit margins gained by most manufacturers, would have an effect, more than likely, on buyers”.

For the records, not only customers would face consequences: “Car suppliers and their products will be affected by tariffs – carried on signatories –. On the one hand, this is bound to make production more expensive; on the other hand, imports of components from other countries, which are more competitive, are due to increase”.

Repercussions on industrial activities 

Both industrial activities and production volumes would face a few repercussions then. “In the event of no deal – they continued in their statement – selling prices would consequently rise and demand for products would go down. Estimates are about 3 million vehicles less in production in the next five years”. Both parties are mutually interested in reaching a free trade agreement: in fact, a no-deal option “would cause European factories to spend 57.7 billion euros – they wrapped up in the letter – whereas British plants would spend around 52.8 billion euros”.

Read also:

 

PREMIUM CONTENT

Choose one of our subscription plans

Do you want to receive our newsletter?
Subscribe now
×
Sei un nuovo utente? Abbonati/Registrati