UK car body warns output will slump if Brexit leads to tariffs with EU

By Costas Pitas

British annual car production will drop by a third to 1 million by 2024 if Brexit leads to tariffs with the European Union, a trade body warned on Tuesday, saying output would be lost to other countries.

Britons head to the polls in just over two weeks to elect a new government with Prime Minister Boris Johnson promising to pass his Brexit deal as soon as possible, whilst the opposition Labour Party would renegotiate and call a referendum in 2020.

If Johnson, leading in the polls, is re-elected, next year is set to be dominated by talks with Brussels on future trading terms, with British automakers seeking the continuation of free and frictionless trade with their largest export market.

The sector, Britain's biggest exporter of goods, warned on Tuesday that World Trade Organisation tariffs on components imported into Britain and exported vehicles would add more than 3.2 billion pounds ($4 billion) a year to manufacturing costs in the worst case scenario.

"By 2024, falling demand and model reallocation to more competitive and welcoming production locations would see annual output falling to just 1 million vehicles per year," the Society of Motor Manufacturers and Traders (SMMT) said.

Production stood at 1.5 million cars in Britain last year but has fallen by 16% so far this year, hit by a slump in demand for diesel vehicles, falling sales in China and a hit to consumer confidence due to Brexit uncertainty.

Honda and Ford have announced plant closures this year but both blamed factors other than Brexit.

Peugeot has said a decision to keep open its Vauxhall car factory in northern England is dependent on the final terms of Brexit.

"The next government must deliver the ambition, the competitive business environment and the commitment needed to keep automotive in Britain," said SMMT Chief Executive Mike Hawes.

© (c) Copyright Thomson Reuters 2019. ht.html

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It is the EU emission regulations that are effectively responsible for slump in demand for diesel vehicles, coupled with the continuous falling sales in China.

Climate change and a proposed carbon duty slowly but effectively is ending ending years of UK dependence on vehicle usage for transportation. And most importantly motor manufactures using UK road infrastructure as a form of mobile warehousing,

Quality pubic transport is the way forward.

Brexit uncertainty? Pull the other one.

Reducing CO2 emissions from passenger cars.

Emissions in the automotive sector......

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From the article:

falling demand and model reallocation to more competitive and welcoming production locations

Falling demand is general, but the possible relocation for future production is very much a Brexit issue.

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