VDA warns against post-Brexit customs barriers
Could UK's decision to exit EU now trigger other countries to offer similar referendums?
Germany's automotive manufacturing and supplier body, VDA, is cautioning against any European Union (EU) imposition of customs barriers following the UK's decision to exit the Brussels association.
Britain's vote last week (23 June) in the long-anticipated referendum saw a majority 52% of the UK vote to exit the EU, although the complex series of negotiations now needed to ensure an orderly rupture may still take up to two years to conclude.
Germany has huge vested interest in continuing to trade normally with the UK, with the its auto sector exporting more to Britain than any other country in the world.
"Following British departure from the EU, it will be in nobody's interest to make the international flow of goods more expensive by erecting customs barriers between Britain and the European continent," said VDA president, Matthias Wissmann.
"The British vote was close. But now it is more important than ever for Europe to stand together to avoid a possible domino effect. Every possible measure must be undertaken to enable the continued free movement of goods and services between the UK and the other EU countries.
"And even after leaving, free exchange of goods with the Continent will still be to Britain's net advantage."
Last year 810,000 passenger cars built in Germany were exported to the UK. In 2015, the British passenger car market reached a new record volume of 2.6m new cars. Half of them (1.3m) had a German group badge.
The VDA chief also appealed for calm in the face of undoubted market volatility following Britain's decision to exit – the first time an EU country will have left the 28-strong club in a move which has sent seismic shocks across the Continent with many in other regions now calling for their own referenda.
"Even if many 'experts' are competing to paint the worst possible scenario – now is the time for calmness," added Wissmann.
"Brussels must draw the correct conclusions from the vote. Our common Europe must become more attractive to its members. We need more transparency and genuinely better regulation.
"The EU must not become a community of constant transfer payments or merely a transfer union."
Wissmann noted the German automotive industry exported more to Britain than to any other country in the world. Last year 810,000 passenger cars built in Germany were exported to the UK. In 2015 the British passenger car market reached a new record volume of 2.6m new cars. Half of them had a German group badge.
The VDA added the British automotive market depends heavily on imports: 86% of new passenger car registrations are of vehicles not produced in the UK, but which but which are imported. A large proportion of them come from EU countries.
At the same time, however, the UK is strong in exports notes the body. Out of the almost 1.6m passenger cars built in Britain in 2015, 1.2m units or 75%, were destined for export.
The main recipients are the other EU states, with just more than half of all exported cars (57%) going to customers in these countries.
In addition, German vehicle makers produced around 216,000 passenger cars in Britain in 2015 (+11%) and so far there has been a year-to-date rise of 9%.
German automotive companies – including a very large number of suppliers – have around 100 facilities in the UK. Since 2010 their number has increased by 30%.
"We should do everything we can to ensure that this success story will be continued. Now it is up to Brussels to take action," Wissmann added.