Brexit: troubles ahead for the automotive industry

According to the European Automobile Manufacturers Association (ACEA), Brexit could undermine the competitiveness of the automotive industry, which represents 6.5% of EU’s GDP and provides employment to some 12.2 million citizens across the European Union.

ACEA is one of the automotive industry’s major lobbying  groups  in the European Union; its members are: BMW Group, DAF Trucks, Daimler AG, Fiat Chrysler Automobiles, Ford of Europe, Hyundai Motor Europe, Iveco, Jaguar Land Rover, Opel Group, PSA Peugeot Citroën, Renault Group, Toyota Motor Europe, Volkswagen Group, Volvo Cars and Volvo Group.

Erik Jonnaert, Secretary General of ACEA, warned that, since the automotive industries of the European Union and the United Kingdom are closely integrated, any changes to this level of integration will most certainly have an adverse impact on automobile manufacturers with operations in the EU or the UK, as well as on the European economy in general. Nowadays, the European Union is UK’s biggest trade partner: more than half of all the cars and 90% of all the commercial vehicles built in the UK are sold in Europe, while seven out of every ten new cars sold in the UK come from EU plants.

Automotive manufacturing is a highly complex industry: a single vehicle consists of around 30,000 parts, while a single vehicle part may be composed of over 30 components and undergoes over one hundred process steps to become a finished product. It may pass through 15 countries, and cross borders multiple times in its material journey.

According to Mr. Jonnaert, the main risks of Brexit include the introduction of tariffs and expensive import-export customs procedures. Tariffs, for instance, could amount to 10% for passenger cars, 10 to 22% for commercial vehicles, and 3 to 4% on average for parts and components.

Therefore, ACEA, together with the European Association of Automotive Suppliers (CLEPA) wish for a tariff- and burden-free market access and for a stable and predictable regulatory framework after Brexit.


Davide Scavuzzo