It’s not just car sales that are threatened by Brexit
When we read or hear about the potential impact of a ‘hard’ Brexit on the UK’s automotive industry we tend to think only about cars and car assembly plants. There is, of course, another important sector which would be equally disadvantaged by the UK leaving the single market and the customs union.
Commercial vehicle exports have risen in the first half of 2017, with 95% of them destined for the European Union. Global demand for UK-built vans, trucks, buses and coaches grew by 11.6% in the first half of this year. Exports to the EU rose by 13.8% in the same period. British commercial vehicle manufacturing has been bolstered by growth in the EU following the recession, resulting in a 13.8% rise in demand from the region. Every British van (24,447 vehicles) and almost two thirds of trucks exported in the first half of 2017 were destined for EU fleets. According to figures released last week by the Society of Motor Manufacturers and Traders, Israel topped the list of largest markets outside of the EU, taking 1.2% of all exports, followed by Australia (1.1%), Hong Kong and Taiwan (both 0.6%), and New Zealand (0.4%).
The UK and European vehicle manufacturing industries are highly integrated, with both vehicles and parts moving seamlessly across borders. Therefore, any changes to tariff and non-tariff barriers or regulatory and labour issues will have a detrimental effect on the competitiveness of this vital industry.
While the EU remains by far the biggest trading partner for British-built commercial vehicles, the iconic British bus is in demand around the world. More than half were destined for Asia and 35.1% for America, while 11.0% travelled the 10,000 miles to Oceania. The commercial vehicle sector represents a valuable and prestigious part of the UK automotive industry and should not be overlooked when Brexit negotiations are taking place.
Speaking of the negotiations, it is hard to see much progress being made. Every UK proposal seems to be met with derision from Michel Barnier and his EU colleagues. I hear a clock ticking. Let’s hope it’s not the clock of a time bomb.
Simon Duval Smith
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