Auto parts suppliers warn hard Brexit may set UK sector back 25 years

Business correspondent(reuters/wp):
Failure to secure a trade deal for Britain when it exits the European Union next year could set the UK auto sector back two decades, leading parts suppliers said on Wednesday as they urged leaders to reach agreement at a summit in Brussels.
Europe’s carmakers’ lobby ACEA and suppliers’ association CLEPA, along with BMW (BMWG.DE) and brakes maker Brembo (BRBI.MI), jointly warned that a no-deal exit would be catastrophic for the industry.

The “just-in-time” industry model relied on frictionless trade between Britain and mainland Europe, they said.

“If we are continuing to be taken hostage by this situation, the flourishing UK auto industry could come back to the situation it was at 20-25 years ago,” said Roberto Vavassori, a management board member at Brembo and president of CLEPA.

The recovery of Britain’s auto sector in the 20 years since the decline of British Leyland and its successor Rover Group was based on investment from around the world, he said.

Vavassori said he felt “betrayed” that Brembo’s manufacturing in Coventry, UK, would be a different prospect post-Brexit from the time of its investment 15 years ago.

ACEA said contingency planning by its members included a temporary production shutdowns and scouting for warehouse space to stockpile parts.

“No amount of contingency planning can realistically cover all the gaps left by the UK’s withdrawal from the EU on WTO terms,” ACEA said, referring to a no-deal scenario in which Britain would have no preferential access to EU markets.