UK auto industry raises concerns over post-Brexit supply chain tariffs

UK auto industry raises concerns over post-Brexit supply chain tariffs

Suppliers to the UK car industry have warned that any post-Brexit tariffs imposed on components and materials used in the production process could have a heavy impact on the supply chain.

This could lead to some manufacturers looking to shorten the supply chain or take the manufacturing process out of the UK altogether, according to a report in the Financial Times.

Tim Lawrence, Head of Manufacturing at PA Consulting, said: ““If you have any tariffs, you would have to fundamentally look at your whole supply chain because you could quickly end up losing your margin on the component.”

The FT also quoted a manager at a motor supplier with plants across Europe, who said: “If we faced tariffs, we would need to make the supply chain shorter and more integrated or would need to take the assembly out of the UK.

“Today in Europe it is easy; there is a good logistics chain; it is easy to get materials from the UK to Europe and the other way.”

The FT listed examples of car components that crossed the Channel several times before ending up in the finished vehicle. The bumpers for some Bentley Bentaygas, for example, are made in Europe then brought to Crewe for inspection before being sent to Germany for specialist painting. They are then returned to the UK for final assembly. Post-Brexit, there is a potential for tariffs being imposed at each stage of the process.

According to trade body SMMT, the UK automotive industry supports 169,000 manufacturing jobs, with 78,000 of these being in supply chain links.

Two-thirds of the £4 billion of components that are exported from the UK go to the EU, while the majority of materials used in British-built cars are imported. Consultancy Vendigital estimates that £12 billion of the £15 billion of materials used in UK cars is brought in from overseas.