Brexit Impact on Automotive sector

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BREXIT IMPACT ON AUTOMOTIVE INDUSTRY TARIFF-FREE ACCESS TO THE EU SINGLE MARKET Goods currently traded between the U.K. and the EU 27 enjoy a tariff-free movement. Access to the EU's single market has made the U.K. a formidable competitor as its supply chain companies can do business with other EU automotive companies and the OEMs (Original Equipment Manufacturers) can tap into a lucrative market of over 500 million 2 consumers . If the U.K. leaves the single market without a proper replacement for the current system, it could result in the introduction of automotive tariffs of 10 percent on passenger cars, 10-22 percent on commercial vehicles, and 3-4 percent on average for 3 automotive components. The U.K. produced a total of 1.8 million motor vehicles in 2016, of which more than 900,000 were exported to the EU. The EU represents 81 percent of the U.K. vehicle import volumes ( 44.7 billion euros) and 52.8 percent of U.K. vehicle export volumes (EUR 4 14.6 Billion). Many OEMs sell 75 percent of their production within the EU. For engines, this figure stands at 55 percent. The chart below outlines the sales of the biggest car manufacturers in the U.K. According to these figures published by the Society of Motor Manufacturers and Traders, U.K., the EU unit sales of Nissan and Toyota, the largest vehicle manufacturers in the U.K., was double the number of their non-EU unit sales. Between them, Nissan, Toyota and Honda made half of the 1.7 million cars built in the U.K. in 5 2016 and employed 16,000 people. 2. Ibid. 3. European Automobile Manufacturers Association, Position Paper <strong>Brexit</strong>. 4. SMMT. 5. Article by Financial Times, Toyota and Nissan take different roads to <strong>Brexit</strong>, March 2017. 2 wnsdecisionpoint.com
BREXIT IMPACT ON AUTOMOTIVE INDUSTRY Exhibit 1 Sales of U.K. Built Cars EU unit sales Non-EU unit sales Honda 50,000 80,000 Mini Vauxhall JLR Toyota Nissan 80,000 130,000 90,000 20,000 100,000 120,000 40,000 120,000 400,000 380,000 0 100000 200000 300000 400000 500000 Source: Society of Motor Manufacturers and Traders (SMMT) Exhibit 2 U.K. Export Share by Region EU US China Turkey Australia Japan Canada South Korea Israel Russia Russia Israel South Korea Japan Canada Australia Turkey China US EU Source: SMMT wnsdecisionpoint.com 3
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