UK's car industry requires continued "frictionless trade" in order to prosper, says Paul Dreschler

The head of the Confederation of British Industry (CBI) has warned that the UK’s car industry would suffer if a customs union agreement is not made with the European Union (EU) when Brexit happens

"If we do not have a customs union, there are sectors of manufacturing society in the UK which risk becoming extinct," Paul Dreschler said, talking to the BBC

Dreschler added that there is “zero evidence” that non-EU trade deals would help in any way, “It’s a myth,” he said. 

Brexit has long been described as a threat to the UK’s car industry, with the Society of Motor Manufacturers & Traders (SMMT) claiming last year that damage has already been done, with domestic demand for UK-built cars falling across multiple months since the vote to leave the EU in June 2016.

Production figures recovered in April 2018, although 2018 so far remains down on the same period of 2017 by 3.9%. 

“Real frictionless trade” is needed to prevent further damage to the UK’s car industry, said Dreschler, adding that the delays and increased costs from trade tariffs would be particularly damaging. 

He said: ”We already know that hundreds of millions have been invested by UK pharmaceutical and finance companies to create continuity post a worse-case Brexit scenario. What could we have done with that money?"

A spokesman from the Government's Department for Exiting the European Union said: "We are focused on delivering a Brexit that works for the whole of the UK, including businesses across the economy.

"We have laid out our approach to our withdrawal and future relationship with the EU in 14 detailed papers we published last summer, numerous speeches given by the Prime Minister and cabinet ministers and the technical notes and slides we published in recent weeks. 

"We will soon publish a White Paper with detailed explanations of our ambition for a future relationship with the EU, building on the positions set out by the Prime Minister."

Read more:

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Brexit already damaging automotive industry, says SMMT president

SMMT issues overseas demand warning as exports hit record levels

UK car manufacturing falls for seventh consecutive month in February

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14

13 June 2018

The CBI have been full on cheerleaders for Project Fear since the referendum was announced.

13 June 2018
gagaga wrote:

The CBI have been full on cheerleaders for Project Fear since the referendum was announced.

It's the largest business organisation in the UK and its members employ over seven and a half million people. Those members certainly apply more thought than those in society who simply regurgitate soundbites which require no effort.

 

13 June 2018
gagaga wrote:

The CBI have been full on cheerleaders for Project Fear since the referendum was announced.

Which project fear are you talking about ? - both leave and remain campaigns used scare tactics, but at least the remain campaign's scare tactics werent racist, unlike leave's.

XXXX just went POP.

13 June 2018

The full on cheerleaders for project fear just happen to represent the vast majority of businesses in the UK. Yes, lets walk away, have WTO, only the matter of tariffs! A 2% tariff would destroy the balance of profitability for most of the car industry in the UK. However, WTO tariff is 9.8% to our largest and closest market. Madness.

What is it with Brexiteers? The cheerleaders of brexit produce nothing in UK (Dyson - all Malaysia, Wetherspoons - beer...., JRM - landed getry, NF- radio phone in), whereas those who employ many thousands of highly skilled workers (Airbus, Inmarsat, virtually every car company) are making sounding grave warnings. When they've gone you can't still keep blaming the EU or project fear you know. Utter dereliction of patriotism.

13 June 2018

As I keep trying to explain, no one is saying 'Let's get out of the EU so that we can be richer'.  Leaving the EU is a POLITICAL decision by 52% of those that voted - they voted for POLITICAL reasons.  Now, you can shout, 'Oh, yes, but leaving will have a profound effect on the economy'.  It might do, it might not - none of us know.  But that's a side issue and actually totally irrelevant.  The decision to leave was based on re-gaining POLITICAL sovereignty of a nation state: The ability to decide its own judicial system, the ability to control its population level, and yes, the ability to set its own trade tariffs.  During the campaign, I never heard, even once, anyone saying that it would be better for the economy if we left - that's not what it was/is about.  As I've said before, a few days after the result, newspapers like the Guardian and the Independent clearly made a decision to counter the argument for leaving by highlighting the (supposed) negative economic issues surrounding Brexit.  They did this, and continue to do so, because they had evidently lost the political argument, obviously.  But it's like a strawman - setting up something to be knocked down that isn't relevant to why people voted the way they did!  To bang on endlessly about the economic woes of leaving is entirely missing the point of why people voted to leave!  And the really odd thing is, no economist would even bet his car on ANY of the fear-mongering stories that 'Britain will suffer' from turning out to be true.  Ask them.  It's just all conjecture.  But as I said, it's worse; it's irrelevant conjecture.

13 June 2018

"As I keep trying to explain, no one is saying 'Let's get out of the EU so that we can be richer'"

I am Bazzer. The UK will be better off overall after it has left the EU.

13 June 2018

Are all the cars in the world only made in the EU?  It's odd, I thought the US, Japan and Korea made cars, too.

"If we do not have a customs union, there are sectors of manufacturing society in the UK which risk becoming extinct."  Does the US, Japan and Korea have a customs union with the EU?

Er, no.

14 June 2018
Bazzer wrote:

Are all the cars in the world only made in the EU?  It's odd, I thought the US, Japan and Korea made cars, too.

"If we do not have a customs union, there are sectors of manufacturing society in the UK which risk becoming extinct."  Does the US, Japan and Korea have a customs union with the EU?

Er, no.

 

You're missing the point. The point is that manufacturers in the UK will be paying more in tariffs on components and the finished product (via absorption) since you're unlikely to garner more favourable trade delas than the EU by virtue of its economic significance.

13 June 2018

Are all the cars in the world only made in the EU? 

No - but it is by far the largest market for UK made cars 

It's odd, I thought the US, Japan and Korea made cars, too.

Yes - startlingly you are correct. Just happens to be entirely irrelevant - this is about selling the cars made here, not buying cars from Korea Bazzer.

"If we do not have a customs union, there are sectors of manufacturing society in the UK which risk becoming extinct."  Does the US, Japan and Korea have a customs union with the EU?

Well funnily enough, Japan is in the process of agreeing free trade with EU (which we will be cut out of).  This whole sorry mess threatens to ruin the remaining industry in this country, whilst people who know better (e.g. the CBI) warn us over & over again, and people who don't know bang on about fishing, sovereignty (which we already had) and passport colour. And Bazzer, anecdotes generated by knocking on doorsteps gives you no more of an insight into why people voted (and it was not the majority of people who could vote, just the majority who did vote) than anyone else. We all talked to other people  - many I know were rather pro-Europe but sure as hell would never vote in a manner that Cameron told them to do - so did not turn out.

14 June 2018

You clearly don't understand the word 'sovereignty'.  A sovereign state is NOT one if it doesn't have:

Control over its judicial system

Control over its population level

Control overits trade arrangements.

 

Sovereign state:

"A sovereign state is, in international law, a nonphysical juridical entity that is represented by ONE centralized government that has sovereignty over a geographic area. International law defines sovereign states as having a permanent population, defined territory, ONE government, and the capacity to enter into relations with other sovereign states. It is also normally understood that a sovereign state is neither dependent on, nor subjected to, any other power or state."

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