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UK car industry warns next PM against 'seismic' no-deal Brexit


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UK car industry warns next PM against 'seismic' no-deal Brexit

by Costas Pitas

 

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FILE PHOTO: Imported cars are parked in a storage area at Sheerness port, Sheerness, Britain, October 24, 2017. REUTERS/Peter Nicholls

 

LONDON (Reuters) - Britain’s car industry warned the next prime minister on Tuesday against a “seismic” no-deal Brexit in October, which it said could add billions of pounds in tariffs and cause border disruption, crippling the sector.

 

Boris Johnson, the frontrunner to succeed Theresa May, and his leadership rival Jeremy Hunt, have said they are prepared to take Britain out of the EU without a deal on Oct. 31, although it is not their preferred option.

 

Industry body the Society of Motor Manufacturers and Traders (SMMT) warned about the scale of disruption a disorderly exit would cause.

 

“Leaving the EU without a deal would trigger the most seismic shift in trading conditions ever experienced by automotive, with billions of pounds of tariffs threatening to impact consumer choice and affordability,” it said.

 

The British automotive industry fears that a disorderly exit from the EU, its biggest export market, could see the imposition of tariffs of up to 10% on finished models and border delays which could snarl up ports and motorways, ruining just-in-time production.

 

A hard Brexit border could cost 50,000 pounds a minute in border delays, the SMMT said.

 

“The next PM’s first job in office must be to secure a deal that maintains frictionless trade because, for our industry, ‘no deal’ is not an option - we don’t have the luxury of time,” SMMT Chief Executive Mike Hawes told a conference.

 

Britain’s car sector, rebuilt by foreign manufacturers since the 1980s, had been a runaway success story in recent years but since 2017 sales, investment and production have all slumped, blamed on a collapse in demand for diesel vehicles and Brexit uncertainty.

 

Brexiteers have long argued that the EU’s biggest economy Germany, which exports hundreds of thousands of cars to Britain ever year, would do its utmost to protect that trade.

 

The British car sector has faced a series of setbacks this year including around 4,500 job cuts at Jaguar Land Rover (JLR) and plant closure announcements from Honda and Ford.

 

Several investment decisions are also due, including whether JLR will build electric cars in its home market and whether Peugeot will keep its Vauxhall car plant open.

 

“If the right choices are made, a bright future is possible,” said Hawes. “However, ‘no deal’ remains the clear and present danger,” he added.

 

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-- © Copyright Reuters 2019-06-25
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I like the many uses of the word "COULD"

"Germany would do its utmost to protect its trade with the UK, " so no extra tariffs on the UK from them, no restrictions on customs, 

"Vehicle sales have slumped due to slump in Diesel sales" The EU have anything to do with this too?

What tariffs are being imposed, ? anything proposed ? anything set in law ?

Or is it again "COULD". just like we :COULD" trade as normal if they chose to allow us, we "Could" leave and do waht we, and the public want, not what the EU thinks we want, and should have

 

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2 hours ago, Joinaman said:

 

What tariffs are being imposed, ? anything proposed ? anything set in law ?

Or is it again "COULD". just like we :COULD" trade as normal if they chose to allow us, we "Could" leave and do waht we, and the public want, not what the EU thinks we want, and should have

 

I suggest you educate yourself.  If we leave with 'no deal' we cannot do what we want. Read up on WTO and GATT24.

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4 hours ago, Joinaman said:

I like the many uses of the word "COULD"

"Germany would do its utmost to protect its trade with the UK, " so no extra tariffs on the UK from them, no restrictions on customs, 

 

Unfortunately for the UK, Germany can't unilaterally waive tariffs on goods from the UK. That's because it's a member of something called the EU.

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9 hours ago, HauptmannUK said:

I suggest you educate yourself.  If we leave with 'no deal' we cannot do what we want. Read up on WTO and GATT24.

This reads like a smug response, you seem to know all, please tell me what under WTO and GATT24 prevents trade agreements being negotiated?

On top of that the UK consumer could purchase a domestically produced car or indeed a car sources from outside the EU.

Welcome you putting me right.

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What car industry? We don't have one anymore, they're all German and Japanese owned. Better warn the EU to come up with a good deal then because we import far more cars than we export, consequently, their carmakers will feel the pinch more than ours.

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13 hours ago, welovesundaysatspace said:

“Project Fear” whining in 3... 2... 1...

Project Fear again and again. It's incessant.
This is just the Remainer motor traders propaganda, looking for the path of least resistance - which happens to be the Remainer part of the UK. They had better go lobby the German manufacturers to up the ante in the EU to make a deal with the UK.

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7 minutes ago, Loiner said:

Project Fear again and again. It's incessant.
This is just the Remainer motor traders propaganda, looking for the path of least resistance - which happens to be the Remainer part of the UK. They had better go lobby the German manufacturers to up the ante in the EU to make a deal with the UK.

His comment was in response to Joinaman's claim that Germany wouldn't have to charge tariffs on UK goods if it so chose. For obvious reasons, or reasons that should be obvious, this assertion is nonsense.

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10 minutes ago, bristolboy said:

His comment was in response to Joinaman's claim that Germany wouldn't have to charge tariffs on UK goods if it so chose. For obvious reasons, or reasons that should be obvious, this assertion is nonsense.

????? His comment was the first one. A general one about the OP and his idea of a Leavers' response.
That is the only thing that's obvious about it.

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10 hours ago, HauptmannUK said:

I suggest you educate yourself.  If we leave with 'no deal' we cannot do what we want. Read up on WTO and GATT24.

What many do not seem to understand, and that seems to include the politicians, is that there is no such thing as a "no deal scenario". In the event of the UK leaving without any "agreement" there would be a mad panic to create hundreds of mini deals to prevent the UK coming to a standstill.

People tend to get hung up on the major issues and ignore the small print, a great deal of UK industry and services rely on the EU for certification and it is a bit difficult to do business without the appropriate paperwork being in place.

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16 hours ago, snoop1130 said:

“Leaving the EU without a deal would trigger the most seismic shift in trading conditions ever experienced by automotive, with billions of pounds of tariffs threatening to impact consumer choice and affordability,”

That's exactly what the country and the motor industry needs right now, a seismic shift. Being in the EU for 40 years has decimated the UK motor industry even more than the unions managed to do. Due to the EU there's a massive trade imbalance to the disadvantage of the UK.

image.png.bb40a05df49649e2903c73bc4be3146d.png

https://www.acea.be/uploads/statistic_documents/Brexit-facts_figures_March_2019.pdf

 

If you want to choose a German car, or another EU imported car, it will cost you more. Yes, that's the same principle as Thailand, but it provides for all those workers employed around Rayong and Ayutthaya.

 

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Clearly the UK will want minimal tariffs on cars, as low as possible. Because that suits both sides (it actually suits the EU more but let's not be spiteful, let's act in good faith for now).

 

If the EU want to put on big tariffs then the UK will match them. Given how many cars the Germans export to the UK, and the downward trend of the German economy right now, they'd be mad to do it.

 

The EU are in a tight spot. They are absolutely desperate to punish/humiliate the UK for leaving their corrupt club but that involves hurting their member states in the process. Will they cut off their nose to spite their face? Or offer us a sensible deal? We'll have to wait and see but either way I'll be happy to be out of their protectionist racket.

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1 minute ago, JonnyF said:

Clearly the UK will want minimal tariffs on cars, as low as possible. Because that suits both sides (it actually suits the EU more but let's not be spiteful, let's act in good faith for now).

 

If the EU want to put on big tariffs then the UK will match them. Given how many cars the Germans export to the UK, and the downward trend of the German economy right now, they'd be mad to do it.

 

The EU are in a tight spot. They are absolutely desperate to punish/humiliate the UK for leaving their corrupt club but that involves hurting their member states in the process. Will they cut off their nose to spite their face? Or offer us a sensible deal? We'll have to wait and see but either way I'll be happy to be out of their protectionist racket.

"The EU are in a tight spot. "

Sure mate, keep on believing that. It is this attitude that has brought the troubles on you in the first place.

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3 hours ago, jesimps said:

What car industry? We don't have one anymore, they're all German and Japanese owned. Better warn the EU to come up with a good deal then because we import far more cars than we export, consequently, their carmakers will feel the pinch more than ours.

Brexiteer delusion.

 

A few facts for you.

 

https://www.acea.be/statistics/article/motor-vehicle-trade-between-the-uk-and-main-eu-partners

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39 minutes ago, Loiner said:

That's exactly what the country and the motor industry needs right now, a seismic shift. Being in the EU for 40 years has decimated the UK motor industry even more than the unions managed to do. Due to the EU there's a massive trade imbalance to the disadvantage of the UK.

image.png.bb40a05df49649e2903c73bc4be3146d.png

https://www.acea.be/uploads/statistic_documents/Brexit-facts_figures_March_2019.pdf

 

If you want to choose a German car, or another EU imported car, it will cost you more. Yes, that's the same principle as Thailand, but it provides for all those workers employed around Rayong and Ayutthaya.

 

Good luck selling cars without access to markets.

 

 

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3 minutes ago, stevenl said:

"The EU are in a tight spot. "

Sure mate, keep on believing that. It is this attitude that has brought the troubles on you in the first place.

Remember what Brexiters were saying before the referendum?

 Getting out of the EU can be quick and easy – the UK holds most of the cards
John Redwood
July 17 2016
 
 The day after we vote to leave, we hold all the cards and we can choose the path we want
Michael Gove
July 17 2016
 
 The free trade agreement that we will have to do with the European Union should be one of the easiest in human history
Liam Fox
20 July 2017
 
 
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16 minutes ago, bristolboy said:

Remember what Brexiters were saying before the referendum?

 Getting out of the EU can be quick and easy – the UK holds most of the cards
John Redwood
July 17 2016
 
 The day after we vote to leave, we hold all the cards and we can choose the path we want
Michael Gove
July 17 2016
 
 The free trade agreement that we will have to do with the European Union should be one of the easiest in human history
Liam Fox
20 July 2017
 
 

That's why they introduced a pre-deal or divorce settlement, which became the WAG and is in fact the Merkel/May Surrender Treaty. It stitches us up with the EU to hinder the trade deals. The trade deal which those above quotes above relate, but haven't even started yet, because we won't accept the WAG and haven't Brexited yet. 

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They should amend the headline "Foreign-owned car industry in the UK" which is a better description and a stark reminder who is really running core business in the country. 

 

If a 'hard' BREXIT does happen then foreign investors will have to relocate to an EU member state and cut their loses with the UK.

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The "average " persons car will not come from Germany but Poland where the labour cost is

about 55% of the UK.

Will they put export tax on them into the UK, ? probably if there is no exit deal.

Will the UK put import tax on them ? You can bet your bottom dollar on it

I will say it again if the UK leave without a deal it will take at least 10 years to climb out of the hole

 

 

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12 minutes ago, natway09 said:

The "average " persons car will not come from Germany but Poland where the labour cost is

about 55% of the UK.

Will they put export tax on them into the UK, ? probably if there is no exit deal.

Will the UK put import tax on them ? You can bet your bottom dollar on it

I will say it again if the UK leave without a deal it will take at least 10 years to climb out of the hole

 

 

What sort of hole do you think the UK will be in when German and Polish car become more expensive to import? I'd say we will be sitting pretty.

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1 hour ago, stevenl said:

"The EU are in a tight spot. "

Sure mate, keep on believing that. It is this attitude that has brought the troubles on you in the first place.

What troubles? Our economy is doing fine, unemployment at it's lowest since 1974. The only thing slowing us down is the uncertainty which will be resolved on October 31.

 

From ft.com in April 2019.

 

image.png.67479ef5b332acfdae8da8321354ba5a.png

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20 minutes ago, natway09 said:

The "average " persons car will not come from Germany but Poland where the labour cost is

about 55% of the UK.

Will they put export tax on them into the UK, ? probably if there is no exit deal.

Will the UK put import tax on them ? You can bet your bottom dollar on it

I will say it again if the UK leave without a deal it will take at least 10 years to climb out of the hole

 

 

First off, Poland couldn't unilaterally put an export tax on the cars. The EU could but why would it do that?

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1 minute ago, JonnyF said:

What troubles? Our economy is doing fine, unemployment at it's lowest since 1974. The only thing slowing us down is the uncertainty which will be resolved on October 31.

 

From ft.com in April 2019.

 

image.png.67479ef5b332acfdae8da8321354ba5a.png

As economists noted, that was because the UK as stocking up on purchases in advance of the anticipated exit. Lately things haven't been so good:

Brexit hangover leaves UK nursing worst monthly contraction since 2016 - business live

https://www.theguardian.com/business/live/2019/jun/10/markets--trade-war-progress-uk-gdp-growth-april-brexit-business-live

 

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15 hours ago, HauptmannUK said:

I suggest you educate yourself.  If we leave with 'no deal' we cannot do what we want. Read up on WTO and GATT24.

 

They don't want to educate themselves. They much sooner prefer to believe Boris, Farage and a few others who tell them we can do whatever we want and make all the rules up as we go along to suit ourselves!

 

Listen to Boris or Farage interviews - they haven't really got  a clue about the detail and simply make it up!

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1 hour ago, bristolboy said:

Remember what Brexiters were saying before the referendum?

 Getting out of the EU can be quick and easy – the UK holds most of the cards
John Redwood
July 17 2016
 
 The day after we vote to leave, we hold all the cards and we can choose the path we want
Michael Gove
July 17 2016
 
 The free trade agreement that we will have to do with the European Union should be one of the easiest in human history
Liam Fox
20 July 2017
 
 

 

Brexiters choose to believe that is true! They prefer to believe it's 'remainer" politicians who've thwarted this very simply task. Leave the EU, negotiate better trade terms with rest of world and EU - what will the do after lunch? 

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