The Real Worry About Brexit In The Car Industry
Tuesday, 24. July 2018
I made a quick comment on this a few weeks ago but I’ve since learned that it’s more serious than I thought. Unknown to many is that car manufacturers are not really manufacturers they are assemblers. They take components from all around the world and assemble them into finished vehicles.
I now understand that the movement of goods around the EU members is free of duty irrespective of where the component parts come from. However, where a free trade agreement has been negotiated between the EU and a non-EU country one of the conditions is that 55% of the product must originate from EU countries. And this is where it could affect the UK badly.
I have a customer who manufactures dashboards for a wide range of cars. They started making them for just one car manufacturer, they now make them for many manufacturers and export them all over Europe. It has now been realised that when we exit the EU we will no longer be considered as part of it when assessing which proportion of cars are made inside and outside the EU.
This could, therefore, mean that in order to meet the terms and conditions of the free trade agreements, even if we come to a free trade agreement between us and the EU we still fall outside the EU and could either cause Europe based car manufacturers to source components from inside the EU for cars being exported to non-EU countries or companies like my client to move to an EU country.
Yet another thing that wasn’t explained before we voted. All very worrying. By Graham Hill
