Driven mad? EU27 car makers panic over EU’s backfiring trade negotiations
UK is EU’s largest world export market - UK consumers buy 26% of EU27 cars
© Brexit Facts4EU.Org 2020
‘Only weeks left to save industry from Brexit disaster,’ says EU’s automotive association
Brexit Facts4EU.Org reveals the extent of the impact of a no deal Brexit
on the EU’s massive automotive sector
The reality of the years of the EU Commission’s intransigent and hostile approach to the United Kingdom in its trade negotiations is finally starting to be driven home within the EU. In particular it is now being felt by the EU27’s huge and failing motor manufacturing sector. We reveal the latest EU industry report, the statements, and the shocking numbers.
Brexit Facts4EU.Org’s analysis of the latest official figures from the EU’s official statistics agency and from the 2020/2021 report by European Automobile Manufacturers' Association (ACEA) shows the severity of the impact they are now facing, unless the EU Commission wakes up and smells the fumes coming from their own industry.
Brexit Facts4EU.Org Summary
The facts about the EU's car makers and the Brexit threat
- The UK is the largest export market in the world for EU27 car manufacturers
- 26% of the EU’s world exports of cars are to UK consumers
- In 2018, 6.7% of the EU’s manufacturing jobs were in or were reliant on the automotive sector
- That’s 14.6 million people’s jobs at stake
- Almost 12% of Germans working in manufacturing are employed by their automotive industry
- EU car exports were worth €124.6 billion in 2019
© Brexit Facts4EU.Org - click to enlarge
The figures above come from the European Automobile Manufacturers' Association and Eurostat (the EU Commission’s official statistics agency). Job totals include direct manufacturing jobs, plus those jobs in other companies which supply the automotive manufacturing sector.
Who does the EU sell its cars to?
As ever, Brexit Facts4EU.Org went to the EU’s official source of data – its statistics agency Eurostat. Here is what they say about the figures for last year.
From the EU Commission's statistics agency
“In 2019, the United Kingdom was the main export destination of the EU's cars (26% of the total), ahead of the United States (20%), China (13%), Japan, Switzerland (both 5%) and South Korea (4%). These six made up three quarters of extra-EU exports of cars.”
EU car manufacturers are starting to panic
The European Automobile Manufacturers' Association has called on the EU urgently to secure a trade deal with the UK.
“Negotiators on both sides must now pull out all the stops to avoid 'no deal' at the end of the transition, which according to new calculations would cost the pan-European automotive sector some €110 billion in lost trade over the next five years, putting jobs at risk in a sector that supports 14.6 million livelihoods.”
The European Automobile Manufacturers' Association’s Director General, Eric-Mark Huitema, said:
“The stakes are high for the EU auto industry – we absolutely must have an ambitious EU-UK trade agreement in place by January. Otherwise our sector – already reeling from the COVID crisis – will be hit hard by a double whammy.”
- Director General, European Automobile Manufacturers' Association, 14 Sept 2020
Last year (2019) EU countries derived €440.4 billion of income from taxes on motor vehicles. The EU27’s exports to non-EU countries were worth €135.9 billion.
The impact on direct employment in the automotive sector alone could be severe
- 2,519,250 people from EU27 countries were directly employed in the automotive industry in 2018
- Germany has over five times as many workers (882,046) directly employed than the UK (166,228)
- The total EU workforce reliant on automotive manufacturing in 2018 was 14.6 million
© Brexit Facts4EU.Org - click to enlarge
The EU’s automotive sector was declining even before COVID-19
Unfortunately for the EU’s automotive industry, things were already going badly before Brexit and even before the COVID-19 crisis. Below are the number of all types of motor vehicles exported by the EU.
- 2018 - 6,023,116
- 2019 - 5,610,731 (-6.8%)
Last year the EU’s exports of all types of vehicles fell by nearly 7% - in one year - and this was before the COVID-19 crisis. To make matters worse, from 01 January 2021 the EU is facing major threats to its sales to its largest export market – the United Kingdom – unless it agrees a serious and sensible trade deal along the lines of the ones it has recently struck with countries such as Canada and Japan.
As we're talking cars, what about the EU’s green agenda?
The EU Commission led by its anointed President, the German Ursula von der Leyen, has the “European Green Deal” as its top priority for the next seven years. This is the first item on the agenda and is apparently more important to the EU Commission than jobs, individual prosperity, or the serious societal problems now evident across the continent.
When it comes to vehicles, the “European Green Deal” has a long way to go. Currently, according to the European Automobile Manufacturers' Association, only 3% of all passenger cars on EU roads are electrically-chargeable.
Thanks to Theresa May’s disastrous pro-Remain Government, the EU’s manufacturing sector seems to have believed that the UK would ultimately acquiesce to the Commission’s dictatorial ‘punishment beating’.
Much can be written about the current UK Government of Boris Johnson on many levels, but so far there has at least been some robustness from Lord Frost and his team of negotiators.
Now it seems that some of the major players in manufacturing and commerce across the continent are at last speaking up – to the EU Commission and to their own governments.
The EU’s vehicle makers and almost 15 million workers
The report issued by the European Automobile Manufacturers' Association must be taken in context. It refers to the risk of damage to both the EU27’s and the UK’s motor industry. It does not help that the UK’s Society of Motor Manufacturers and Traders have consistently supported the Remain position, of course, and that they are part of the European Automobile Manufacturers' Association. (Known as the ACEA, because it’s based in Brussels.)
The statement accompanying the 2020/2021 report from the ACEA is clear. The EU’s car manufacturers are now deeply worried, as the quotations above show. With exports falling significantly before COVID was even on the horizon, and with the UK no longer part of the EU from the end of this year, the EU’s importance as a global car manufacturer will be much reduced.
The UK is the EU’s largest car market by some margin. As things stand, the obdurate and unreasonable stance of Monsieur Barnier and his colleagues may yet deliver what many of us have said would happen all along: a normal WTO terms trading relationship. This will mean a tariff of 10% on cars.
For millions of car workers across the EU whose jobs are already threatened, they just might start having something to say about the EU.
Then Bundeskanzlerin Merkel might have to wake up quickly and smell ‘den Kaffee’….
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[ Sources: European Automobile Manufacturers' Association | EU Commission's official statistics agency, Eurostat ] Politicians and journalists can contact us for details, as ever.
Brexit Facts4EU.Org, Tues 10 Nov 2020
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