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No Deal Brexit: European carmakers say a disorderly break would be "catastrophic"



The economy has long urgently needed clarity about Brexit. However, the joint call of 23 industry associations from across Europe is new and reflects what they call a potential "seismic" disruption to car manufacturers and their suppliers.
A "no deal" Brexit would have a direct and devastating impact on the industry. "Mike Hawes, CEO of the British Society of Automobile Manufacturers and Dealers, has stated in a statement that this undermines competitiveness and causes irreversible and serious damage."

"Negotiators in the UK and the EU have a responsibility to work together to negotiate a deal or take the risk of destroying this important pillar of our economy," he added.

It is not clear if the worst can be avoided. British Prime Minister Boris Johnson has promised to get Britain out of the block on October 31
, regardless of whether an exit agreement has been agreed or not. His government's talks with EU officials have not yet broken through, and the clock is ticking. The talks will continue on Monday at the United Nations General Assembly in New York.

If Johnson did not enforce his threat to leave the European Union without an agreement, he would end duty-free trade with a market accounting for 57% of British car exports. This would confuse the supply chains on which car makers depend, disrupt production and weaken profit margins.

Luc Chatel, president of the French industry association PFA, said a disorderly Brexit would have "direct" effects on tariffs, customs and logistics. "As with all sectors of the economy, there will also be indirect effects as European growth is expected to slow down," he added.

The auto industry claims to account for about 6% of EU employment or nearly 14 million jobs.

  The US auto industry is almost extinct in Europe.

Manufacturers with offices in the UK are already suffering from uncertainty as to when and how the country will leave the European Union. British vehicle production has been declining for 14 consecutive months as demand in key markets has been weak and temporary plant closures have been brought forward in anticipation of Brexit.

According to SMMT, tariffs alone would cost £ 4.5 billion ($ 5.6 billion) per year.

Honda ( HMC ) plans to close a large factory in England employing 3,500 people. The plant currently produces up to 150,000 citizens per year in over 70 countries. Nissan NSANF ) has rejected plans to build his new X-Trail SUV at his plant in Sunderland. It was said that the uncertainty over the Brexit was partly to blame.
The French automaker PSA ( PUGOY ) has warned that further production of the Vauxhall and Opel Astra in the UK will depend on the country's trading conditions after Brexit. It is the only model currently produced in the group's factory near Liverpool. "Decisions that are yet to be made are critical to the location," a spokesperson said in July, Wales until 2020. While the US company said the decision was not related to the Brexit, it previously warned of the dire consequences of one chaotic exit.

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