The words of the prime minister of the United Kingdom, Theresa May, have not sat well to the car manufacturers. Right now the Uk is one of the leading manufacturers of passenger cars and commercial vehicles in the european bloc, and the second market is more bulky. Last year the british voted “Brexit”, that is to say, to quit the European Union.
to Be within the single market has the advantage of not having customs fees or on vehicles or components
the intentions of The government tory (conservative) who presides over May is to get out of the single market so as not to have to submit to requirements of eu as freedom of movement of people. Get out of the single market implies a need to negotiate a trade agreement specific or back to withstand a 10% tariff, according to the laws of the WTO.
In practice, the “hard Brexit” means that the United Kingdom is back to being an insular country, isolated from the continent. When a british buy a car manufactured on the other side of the English Channel will pay an additional 10% in customs fees. The same thing happens the other way around, buy a british car in Europe you’ll pay more for an alternative in the same segment.
According to the SMMT british, you will lose approximately 5,300 million euros in tariffs according to the current figures
According to the Real Instituto Elcano, United Kingdom did not opt in to a deal more beneficial to that already enjoyed. That is to say, to tell Theresa May to what you say, get out of the single market is not beneficial to both economies. The car manufacturers want that May get, be that as it may, no customs fees to both sides of the Channel. Otherwise, the competitiveness of their factories to worsen significantly.
More than half of the production of Uk goes to the EU
manufacturers such as Aston Martin or Rolls-Royce out of the single market is a gigantic problem because their customers pay whatever is needed, a 10% above or below is not decisive. In normal cars, such as compacts or subcompacts, the difference is noticeable much more. A separate issue is the exchange rate of the pound, because the Uk did not adopt the euro.
time Nissan and Toyota have pledged to keep the factories in Sunderland and Burnaston although consuming the “Brexit” hard, which implies a return to the way of working before. Yes, other manufacturers may condition future investments to know what’s going to happen really. At the moment the Uk Government is not very clear, it plays to the lack of definition and there he is getting nervous.
For example, the German manufacturers -represented by the VDA – are very aware of what’s going to happen. Not only are they thinking about the vehicles that they export to Great Britain, also to the factories that are his own. MINI, Bentley, Rolls-Royce, Vauxhall… produce cars in that country. Today the vast majority of the car industry and british is not in their hands, but the germans, japanese, indians, americans, etc Only they get rid of Morgan, Caterham and McLaren.
you must Also consider that the cars are not falling from the trees already made, and that there is a significant movement of parts on both sides of the border, so that is affected the entire value chain. The “Brexit” hard is the solution most dreaded of all this matter. Some manufacturers have dropped they will have to compensate them if they come back the tariffs.
This means that the Uk will have to pay from its coffers to the public the price differences by customs barriers, or to provide tax exemptions, or treatment of any other type. In theory, Nissan got the british Government on conditions very advantageous in the future, which allowed for the award of the future Qashqai and X-Trail to Sunderland.
formal conversations to leave the European Union will begin in a matter of few months
In the course of the Uk get a trade agreement is less bad than the standard (10% tariff), it would take almost five years to enter into force. While the United Kingdom, may lose allotment. According to the Automobile Association, this sector employs more than 800,000 people, of which 169.000 work in factories (direct jobs).
The manufacturers take the investment decisions well in advance, before producing the first piece of a car. The changes of production sites are not made lightly, usually coincide with a restyling or a completely new model. to Mount a new factory, takes more than a year and thousands of millions of euros. Take out of the Uk so much production, something less than two million units, is a logistical nightmare.
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If the tories fail to give sufficient security to the investors, the money will begin to run. The rest of the european countries can benefit from the fray, as the nations of the east, which are proving to be key pieces in the expansion of the european automotive industry for its competitiveness.