A month before Britain is due to quit the European Union, the bloc's car-makers have joined forces to warn of billions of euros in losses in the event of a no-deal Brexit with production stoppages costing 50,000 pounds a minute in Britain alone. Britain is scheduled to quit the EU on October 31 but businesses have grown increasingly concerned at Prime Minister Boris Johnson's apparent lack of progress toward a new withdrawal deal to replace the proposals of his predecessor Theresa May, which the British parliament rejected three times.
In a statement, groups including the European Automobile Manufacturers' Association, the European Association of Automotive Suppliers and 17 national groups warned of the impact of "no-deal" on an industry which employs 13.8 million people in the European Union including Britain, or 6.1 per cent of the workforce. "The UK's departure from the EU without a deal would trigger a seismic shift in trading conditions, with billions of euros of tariffs threatening to impact consumer choice and affordability on both sides of the Channel," they wrote in a statement issued on September 23.
"The end of barrier-free trade could bring harmful disruption to the industry's just-in-time operating model, with the cost of just one minute of production stoppage in the UK alone amounting to 54,700 Euros or 50,000 Pounds" (~Rs 4.4 Crores). If the two sides revert to World Trade Organisation trading rules, the likely consequence of a disorderly Brexit, the groups warned that the necessary tariffs will add 5.7 billion euros to the EU-Britain car trade bill.
The European car industry is dependent on heavily integrated cross-border supply chains, which rely for their effectiveness on a zero-tariff, almost border-free environment within the EU's customs union. Britain's car industry, which is almost entirely foreign-owned, is exceptionally vulnerable, as it is dominated by factories owned by German, French and Japanese automakers.
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