Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ World https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ No-deal Brexit and Covid threaten ‘double whammy’ for the car industry

No-deal Brexit and Covid threaten ‘double whammy’ for the car industry



Cars in SheernessImage copyright
PA media

British and European carmakers have warned that Brexit could, by agreement, put a dent of £ 100bn. In the region’s automotive industry for the next five years and increase the large losses already caused by Covid-1

9.

A letter signed by 23 trade groups across Europe calls on the government to reach an agreement rather than comply with WTO rules.

Standing without one, there will be a “catastrophic” increase in tariffs.

A government spokesman said it was “working hard” to reach an agreement.

The industry has already taken a hit of £ 90bn. This year due to Covid-19, SMMT added.

The United Kingdom left the EU on 31 January but will enjoy duty – free trade with the bloc until the end of the year as part of the transition period.

But fears are growing that both sides will not be able to conclude a long-term trade agreement before then.

The European Automobile Manufacturers Association (ACEA), which wrote the letter, said securing a trade deal before January was an absolute “must” for companies on both sides of the channel.

“Otherwise, our sector – which is already emerging from the Covid crisis – will be hit hard by a double-edged sword,” said CEO Eric-Mark Huitema.

‘Gloomy’

Mike Hawes, head of the UK Society of Motor Manufacturers and Traders (SMMT), said a trade agreement was crucial because the UK and EU industries were so integrated.

“These figures paint a bleak picture of the devastation that would follow a ‘no deal’ Brexit,” he said.

“The shock of tariffs and other trade barriers would exacerbate the damage that a global pandemic and recession have already done, endangering businesses and livelihoods.”

Industry associations on the continent, including from Germany, France, Ireland, the Netherlands, Belgium, Sweden, Denmark, Italy, Portugal and Eastern Europe, also say they fear job losses in their own countries.

According to the WTO, car exports will have a customs duty of 10% and increase to 22% for vans and lorries.

This would hit car manufacturers’ margins and tariff increases passed on to consumers and affect demand. Car suppliers and their products will also be affected.

SMMT said it could lead to $ 49 billion. Pounds in lost business for British car plants and 52 billion. Pounds for them across the EU by 2025.

It called for a free trade agreement that would also apply to alternatively powered vehicles and car components and “involves zero tariffs or quotas”.

A government spokesman said: “We want to reach a free trade agreement with the EU that is based on precedent and fundamentally recognizes in our position as an independent, sovereign country.

“We remain committed to working hard to reach an agreement by mid-October, and we look forward to continuing discussions this week.

“At the same time, we are largely in touch with the automotive industry on how they can prepare for changes in trade at the end of the transition period when we leave the single market and the customs union.”


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