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

‘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

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

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.

Observations

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’….

You have just read another serious, well-researched report which informs the whole debate about Brexit and trade deals. These reports take a lot of time to research, and then a lot more time to present them in an easily digestible format for the public and for MPs. If you appreciate our work to ensure a free, independent, and sovereign United Kingdom, could we ask you just to pause for a moment and go to the donation links below this article? Every donation, no matter how small, is vital to our continued operations. Thank you so much.

[ 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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Reader Comments 42

11. Jan Close , Tuesday, November 10, 2020, 10:58:

Let the Eu bring on the Tariffs for self destruction of their industries and sadly their Workers in their quest for domination, The world is open for trade at the cost of the Eu .

12. Andy , Tuesday, November 10, 2020, 11:49:

Ian, No 10. Not just tariffs. I was hoping for President Trump's reelection because there is a huge case for the application of anti-dumping duties on EU Car exports. The Euro is an undervalued and manipulated currency, so an anti-dumping duty of 25% would not be inappropriate. If applied in the UK and the USA it would go a long way to destroy the German car industry. However, even if we apply the duty it could kill their share of the UK market.

13. Mike S , Tuesday, November 10, 2020, 11:53:

Let the EU suffer for it's action's over the Brexit period as well as the last 40+ year's! This is a self inflicted effect of all the criminal act's they have inflicted upon all the nation's of the EU. Let them ram that right up themselves! The same goes for Biden in the USA! He isn't even in office yet & he is ALREADY telling us what to do in regards to Brexit! Yet another interfering foreigner assuming to have authority over the UK! Tell Biden the same as the EU & that is to "Jog on",to put it politely, & take his anti-British sentiment with him! Buying British & only British is the best way to hurt them! They'll soon come running back to us,begging for us to buy from them when their profit's are no longer as high as they want!

14. Diane , Tuesday, November 10, 2020, 11:57:

As expected, the Lords voted down the proposed clauses within the government's Internal Market Bill yesterday, this so called tactical and unwelcome distraction to the negotiations. I just wanted to says hats off to Kate Hoey for her speech on the matter & her support for patriotism and for N I, in the Lords last night. Didn't get us anywhere but good to hear.

15. JonL , Tuesday, November 10, 2020, 16:47:

Mark Brown: I completely agree. The medium and long-term effect of introducing tariffs is bound to be to move some manufacturing back to the UK to avoid those tariffs, and economics is bound to beat rhetoric in the end.
For your amusement, the BBC had a tear-jerker of a story yesterday about a lady whose business in knitted tights was going to be harmed by the introduction of tariffs. The reason being that although her company was based in the UK, she has the manufacturing done in Italy. Neither she nor the BBC could figure out that perhaps she could find a manufacturer in the UK. After all, before we joined the EU, we *used* to have a textiles industry, and could have one again, a highly automated and computerized one at that.
But no, to the Beeb it was all about wicked Brexiteers harming SMEs and torturing puppies.

16. JonL , Tuesday, November 10, 2020, 16:49:

Andy 12: I agree, but we should also remember that the last time the German car industry went bust, in the Thirties, Whatsisname switched them to manufacturing tanks.

17. Derek Lund , Tuesday, November 10, 2020, 20:33:

C'mon, JonL 15; the BBC are stuffed with people who've never had a proper job so it's not fair to expect the poor darlings to come up with the idea of relocating production to the UK.
Anyhow and sadly, the plant and the savoir faire may no longer exist here. I once worked in the textiles industry. We took great pride in the fact that we did everything from spinning, weaving, dyeing, printing and sewing. China pulled the rug from under all that. Happy memories of scrambling over products at stock take time, shouted conversations over the bloody din in the weaving shed, calculating the due date of a sales invoice based on the rules of the Manchester Cotton Exchange and much much more.
On the wider point of manufacturing within the UK, wouldn't it be priceless if, in order to take advantage of the UK's shiny new trade deal with the USA, the BMWs of this world relocated some of their production to the UK? Can you imagine the look on their faces in Brussels?

18. Ross , Tuesday, November 10, 2020, 20:44:

The way Boris is behaving and reacting to Biden's false anointment as POTUS elect (a media term) I would not trust Boris for a second. I think Sharon #1 is right and the UK should be very worried. In fact it would not surprise me to find, in future years, that Boris and Biden have the same person/people pulling their puppet strings.

19. JonL , Tuesday, November 10, 2020, 23:05:

Derek Lund 17: Yes, certainly we will never compete with China, since we lack a billion rural workers willing to move to factories for minimal wages, but I think that with a bit of technical effort, we can compete with Italy. I can't think that we can produce world beating AI software but not be able to produce knitted tights.
On cars, I am pretty sure that some manufacturing *will* move to the UK. German manufacturers set up factories in the US South in the eighties and nineties, and in the past two decades they have set up shop in Eastern Europe. In those cases wages had a lot to do with it, but import tariffs are just another cost of business, and you manufacture where you can optimize your costs.
As for the BBC, we seem to have forgotten how competition improves corporate performance. And no corporation that can force its customers, by law, to pay it, is experiencing competition.

20. ste yorks , Wednesday, November 11, 2020, 09:19:

dear readers,
this is my take on the world - the world is run by 5 capitol cartels that run the banks that lend the money that in turn run all the governments . The recent wars in the middle east etc are a result of the oil producing nations wanting to set up their own cartel to rival the other five. The climate change dogma is all associated with removing the need for oil and the west dependancy on oil therefore removing power and money from those arab nations, the arab nations have responded by paying for literalist/intolerant versions of islam being taught in the west, thus causing terrorism, and 9/11 was one of the retorts.
I am faily sure that the uk has one of the cartels, japan one too, and the rest are USA and spread across the west. the globalists like biden, the EU, and the left etc are all in favour of the power and control they gain from doing the money-lenders business.
i am not sure how brexit will re-align any cartels but i doubt they will be happy about it, but remeber the cartels control the banks that control the governments, not the other way around.
so what evidence do i have for the above statements ? well very little, all smoke and observation really, but do some research and see what you think for yourselves, don't just choose to believe me or deny it all.

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