UK’s globalised car industry wary of Brexit impact

UK’s globalised car industry wary of Brexit impact

PARIS, France — This should be a fine time for British carmakers, with sales on the rise, but for one major storm front — the impossible-to-predict ramifications of the country’s vote to leave the European Union . As British industry leaders showed off their wares Wednesday beneath the Eiffel Tower ahead of the Paris Motor Show, Britain’s EU exit remains a vexing concern because it’s not clear how the complex and highly globalised auto trade will be affected. “Being part of the single market is fundamental to the current strength we’re enjoying,” said Mark Hawes, head of Britain’s Society of Motor Manufacturers Traders. “Our biggest concern is about competitiveness of the sector.” The British automotive industry has attracted record investment in recent years, including more than three billion pounds in 2015, he said next to a stand of the latest models of Jaguar, Aston Martin and other UK-made cars. But the growth “could be jeopardised because of that uncertainty,” and if Britain’s departure from the EU single market results in high tariffs or too much new regulation.
Most expect Brexit to be disruptive and to raise costs for companies, but the hard talk negotiations between Britain and the EU on the crucial issues of tariffs and the free movement of labour are still months away and will possibly take years to resolve. That means years of uncertainty over the cost of building cars in Britain and the ease of exporting them to other EU countries. It will also create doubts about how difficult it will become to import vital car parts from other EU countries, to say nothing of the restrictions likely to be put in place on the free movement of skilled workers needed to assemble vehicles. “You won’t think at the moment of investing in Britain,” said Stefan Bratzel, director of the Center of Automotive Management in Bergisch, Germany. “You need stability, you want to know you are investing in a stable environment, and you don’t have it.” This comes just as the industry was enjoying a good run of health — production grew more than 12 per cent in the first half of 2016 when compared with the year before. While the drop in the pound since the June vote to leave the EU has helped car exports from Britain, overall uncertainties are casting a shadow over the future. “We had a short-term gain, but we are very mindful of the long term,” Simon Sproule, marketing director for Aston Martin, said in Paris. In the meantime, the company is focusing on non-European markets, too. “The big picture is that we’re a global growth business as well,” he…

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