Brexit Could Prove Disastrous for Automakers in the UK

Companies that build all their cars in the U.K. are facing serious concerns due to Brexit.

Aston Martin, for example, may have to stop production of its vehicles if the U.K. government doesn’t secure a Brexit agreement with the European Union. Speaking to the Business Select Committee, Aston Martin’s chief financial officer Mark Wilson outlined how potential problems with vehicle certification could significantly impact the company.

That’s because currently all new cars manufactured in the U.K. must receive Vehicle Certification Agency (VCA) approval, which is valid in the EU. But if the U.K. is unable to reach a deal for Brexit, VCA validity for new models in Europe could cease in March 2019. And since companies aren’t allowed to hold simultaneous type approval from two authorities, U.K. automakers would be forced to apply for new vehicle certification that would be valid in Europe, causing them to stop production in order to do so.

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“For Aston Martin, it’s simpler than for larger international players,” Wilson told the committee. “We’re a British company, we produce our cars exclusively in Britain and will continue to do so. Without VCA type approval, it really is a stark picture for us. We need to make sure that type approval carries over, has validity and recognition, and has the equivalence it has today.”

If not, Wilson added it would have a “semi-catastrophic effect of having to stop production,” since Aston Martin only produces cars in the U.K.

Joining Wilson in calling for clarity over a Brexit transition deal was Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, and Patrick Heating, who is Honda Motor Europe’s government affairs manager. Hawes stressed how companies don’t just make an investment at one particular point, but rather there’s constant investment. He told the committee that companies need more certainty by the turn of the year, because contingency arrangements would have to be put in place.

Keating added to the discussion, calling for clarity by March 2018, saying it would take 18 months for Honda to get its systems ready for potential new customs procedures for exporting to Europe. The automaker imports two-million components from Europe each day and Keating estimated a 15-minute delay at customs could cost the company £850,000 ($1.1 million USD) a year, since the company carries just one hour of stock on its shelves.

[Source: Autocar]

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