With Brexit drawing nearer, car manufacturers have demanded Britain stays in the customs union when the UK leaves the EU. The Society of Motor Manufacturers and Traders (SMMT) have warned that hundreds of thousands of jobs are in danger without a deal. Motorists could also face paying more for cars and being restricted in their choice.
SMMT chief executive Mike Hawes went into detail. “Continuation of customs union membership is the minimum for the car industry. How else will a UK supplier ship his components across Europe without delay and without additional cost? Imported components comprise about 60pc of the parts of the 1.7 million cars built in Britain last year and any delay to their arrival at factories would be disastrous.”
“We operate ‘just in time’ manufacturing and measure deliveries – and delays – in minutes, not hours or weeks. The industry has wafer-thin margins and any delay, disruption, additional administrative requirement will involve cost, undermining our hard-fought competitiveness.”
Currently, the British car industry employs 170,000 in manufacturing and 800,000 in other roles, leading to an annual turnover of £77.5 billion. The SMMT warning came after the HMRC said Boris Johnson’s “maximum facilitation” system to avoid border delays through the use of new technology and pre-approving big manufacturers would add £20 billion a year to British businesses’ cost.
2.5 million cars were sold in Britain in 2017, making it one of Europe’s largest markets. It wouldn’t stop manufacturers from pulling back unless an agreement on regulation was reached. Hawes added “The UK is a big market, but it is not big enough to warrant its own rules for automotive. It is essential that, post Brexit, vehicles can be sold in the UK without the need for new certificates.”
If a customs deal wasn’t reached then it could create an opportunity for UK suppliers to increase their content in cars built in Britain. It goes to show that getting a customs deal is one of many important factors that needs to be considered for the car industry in a post Brexit world.
