Daniel Boffey for The Guardian reports that carmakers operating in the UK have significantly decreased investment over the last year due to concerns fueled by the uncertainty of what post-Brexit trade looks like for the British automotive industry. Industry leaders acknowledge that a trade deal is unlikely to be struck within two years’ time and are concerned that the movement of parts and vehicles between the UK and EU could be subject to WTO imposed tariffs — currently at 10 percent for passenger cars and 22 percent for commercial vehicles.
This uncertainty is cause for concern because the trade within this industry between the EU and UK is vast. More than half of all cars made in the UK are exported to the EU, as are 90 percent of commercial vehicles. Likewise, the vast majority of vehicles imported into UK come from EU.
Speaking at an event in Brussels, Michael Hawes, chief executive of the Society of Motor Manufacturers and Traders said:
The industry has been a tremendous success in the last five or six years. In terms of investment, it has been running at an average of £2.5bn per annum. Last year it was down to £1.6bn, it has dropped off. Anecdotally you will find that companies are sitting on their hands to a certain extent until there is more clarity on the situation.
The UK government has already invested considerable funds in the British automotive industry, with nearly £800 million granted to carmakers in the decade prior to 2015, according to our research. Companies that have received substantial funding include Tata Motors (maker of Jaguar and LandRover), Nissan, Ford, Rolls-Royce, General Motors (makers of Vauxhall), Peugeot, and Toyota, among others.
To read the original news story click here: Brexit: UK carmakers ‘sitting on their hands’ rather than investing | Business | The Guardian