Insider Economy German carmakers warn hard Brexit would be "fatal"

German carmakers warn hard Brexit would be “fatal”

German carmakers on Wednesday warned of fatal consequences if Britain left the European Union without a divorce deal, predicting job losses in Britain and Europe and urging lawmakers to redouble efforts to ensure tariff-free trade can continue.

British Prime Minister Theresa May’s deal to leave the EU suffered an overwhelming defeat in parliament on Tuesday, leaving the country’s future in limbo and manufacturers bracing for their “worst-case scenario”, a no-deal Brexit.

Britain would suffer most if it lost free trade with European markets since 80 percent of vehicles assembled in the country are exported, mostly to the European Union. But for Germany the stakes are also high.

In 2016, Britain was the largest single export market for German manufacturers, who sold 800,000 new cars there, or 20 percent of their overall global exports. Fewer cars are exported to China and U.S. because German carmakers have factories there.

“The consequences of a ‘no deal’ would be fatal,” German auto industry association VDA said after the vote.

“Without an orderly and practical solution for business, jobs in the car industry, particularly on the British side, are on the line.”

BMW, Volkswagen and Daimler, parent company of Mercedes-Benz, urged British politicians to create clarity over Brexit and ensure tariff-free trade can continue.

“Uncertainty is not good for business… we must therefore continue to prepare for the worst-case scenario, which is what a no-deal Brexit would represent,” BMW Group said.

“We strongly urge all relevant stakeholders to do everything possible in order to establish much needed certainty for our business and to maintain the truly frictionless trade on which our international production network is based,” BMW said.

BMW, which builds 60 percent of its Mini vehicles at a plant in Oxford, southern England, relies heavily on components imported from BMW’s German plants. It has beefed up its logistics to include air freight options.

Tariffs are a problem for low-margin high volume automakers like Toyota, which has a factory in Derby, and Nissan with operations in Sunderland but also for Volkswagen which has no British factory and relies on imports to serve U.K. customers.

“We took note of the results of the vote in Britain’s parliament with regret,” Volkswagen said.

“It represents a further phase of uncertainty and hampers our ability to plan ahead. We and the entire industry need clarity about the nature of relations between Britain and the European Union. Every further delay in the Brexit decision-making process puts investment and jobs at risk,” VW said.

Daimler said it aimed to ensure goods can continue to enter and exit the U.K. in a timely manner after Brexit.

(Reuters)

Top Stories

11 new Covid cases in Cyprus, number steadily down, tests rising

  11 new cases of Covid-19 were announced today in Cyprus, out of a total of 3,314 diagnostic tests, taking the total number to 1233. New...

Police fire tear gas at Beirut protesters furious after explosion

  Lebanese riot police fired tear gas at demonstrators trying to break through a barrier to get to the parliament building in Beirut during a...

82 year old killed in Paphos while trying to move his car off the pavement-victim named

  An 82 year old man was killed this morning in Paphos, as he was trying to move his car away from a pavement near...

Paphos fire has scorched 5 square kilometres, still raging, destruction ‘biblical’ (update)

  A fire that broke out early this morning near the Paphos community of Archimandrita and spread on a 20 kilometre front near the villages...

Brazil COVID-19 deaths reach 100,000 and barrel onward

  Brazil’s death toll from COVID-19 is expected to hit 100,000 today and continue to climb as most Brazilian cities reopen shops and dining even...

Taste

Octopus ‘Kathisto’ (or Octopus braised in Wine)

Ingredients: 1/2 cup Greek extra virgin olive oil 2 medium onions, chopped fine 1 large octopus, about 2kg (cleaned and kept whole) 3/4 cup dry red wine 1/3 cup...

Homemade lemonade

Ingredients: 1 cup lemon juice 1 cup sugar Method: Thoroughly wash the lemons with soap and warm water. Roll each lemon with the palm of your hand, pressing...

‘Striftaria’ mini cheese pies

Ingredients 1 ½ cup milk 2 tbsps. flour 4 tsps. of butter 3 eggs, slightly beaten + 1 extra with 1 tbs. of milk for spreading 1 pack of...

Mini potato canapes baked on salt

Ingredients Serves: 12 1kg small Cypriot potatoes rock salt, as needed 250g salted butter 300ml full fat cremé frâiche 1 pot cod or salmon roe Method Prep:20min › Cook:35min › Ready in:55min Take...