Wednesday

22nd May 2019

Car industry has 'lots of questions' about Brexit

  • About 10 percent of EU's car manufacturing is done in the UK (Photo: Wooly Matt)

As for all industries in Europe, the outcome of the EU referendum in the United Kingdom is creating a lot of uncertainty. So too for the automotive industry.

“As you can imagine, there are still a lot of question marks,” said car industry lobbyist Erik Jonnaert.

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“A lot of these questions will depend on how these negotiations will evolve, between the UK and the rest of the European Union … You have questions, we have questions as well,” he told EUobserver in an interview on Monday (27 June).

Jonnaert is secretary-general of the European Automobile Manufacturers Association (ACEA), a Brussels-based car lobby group, which has most of the big brands as its members.

“Clearly we have an interest to keep this internal market for automotive as much as possible alive, you can imagine that. The UK is a big manufacturing hub for the automotive industry,” he said.

According to ACEA figures, 1,539,456 passenger cars were produced in the United Kingdom in 2014. That was around 10 percent of EU production. Only Germany (36 percent) and Spain (12 percent) had a higher output.

The UK is also home to 33 of the EU's 221 manufacturing plants - only Germany has more (41).

“You could say there is no British manufacturer anymore - Jaguar Land Rover being Tata now - but there is a lot happening when it comes to automotive in the UK,” said Jonnaert, noting that especially Japanese car companies have production plants in the UK.

“These days a lot of companies operating there have a very integrated model. Their supplies for parts come partly from the UK, but also partly from the continent.”

According to Jonnart, there is an important trade flow of car components going to and from the UK.

“All these trade flows could be affected ... Big question mark. That will depend on the outcome of the negotiations.”

So far though, these negotiations will not happen until the UK government triggers the article 50 procedure. Despite a majority of those voting in the referendum calling for a British exit, or Brexit, from the EU, the vote itself did not make it so.

The UK is still an EU member.

“That means that also the UK is going to be still involved in the discussions on the revision of the type approval directive,” said Jonnaert, referring to the legislation which deals with certification of cars before they can be put on the market.

This process, called type approval, came under fire after the recent scandal with Volkswagen diesel cars. Last January, the EU commission proposed a reform of the framework.

Just like any other EU country, the UK will have a chance to give its opinion on the proposal.

“They still have an opportunity to change it, and to modify it,” said Jonnaert. “Will it apply to them, afterwards? Again, big question mark.”

The full interview with Erik Jonnaert on the aftermath of the Volkswagen scandal will be published on EUobserver later this week

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