Yahoo Autos European Automakers Brace for No-Deal Brexit, Multi-Billion Dollar Losses
No-deal Brexit could cost U.K. auto industry $74 billion over 5 years
Automakers have already been stockpiling parts for years ahead of Brexit
WTO rules could see steep tariffs on EVs and PHEVs
After four years of preparations, delays, and now a production and sales slump sparked by the coronavirus pandemic, being an automaker or supplier with a footprint in a post-Brexit U.K. is looking less and less appealing. And not just in the U.K., but across the channel as well.
After suffering a 33.8% decline in the year-to-date output compared to 2019, automakers and suppliers with U.K. manufacturing presence still face something set into motion more than four years ago, as the threat of a no-deal Brexit and an uncertain EU trading environment looks more likely with each passing week. The Society of Motor Manufacturers and Traders (SMMT), a U.K. automotive industry trade association, warned days ago that tariffs possibly set in place on Jan. 1, 2021, could cost the U.K. auto industry £55.4 billion over five years, approximately $73.85 billion at today's exchange rate. A no-deal Brexit would also cost the pan-European auto sector some €110 billion in lost trade by 2025, the SMMT noted earlier this fall, or about $132 billion. This would add to some €100 billion in losses attributed to disruption caused by the pandemic in just several months this year.
