19 December 2016

Statement

European Automotive Industry Response to Brexit

Introduction

Today, European automotive suppliers lead the world in the design, engineering and manufacturing of key vehicle components and systems technologies. A crucial factor behind this has been the success of the Single Market and the positive benefits of European Union membership.

The European automotive sector employs more than 12 million people, produces a quarter of the world’s vehicles each year and represents more than 6% of the EU’s GDP.

The UK plays an important role for our sector, with manufacturers and suppliers highly integrated across Europe. In the last 5 years, the production of cars in the UK increased by 25% up to 1.6 million cars in 2015 and is expected to reach 2 million by 2020. The UK is therefore one of Europe’s top automotive manufacturing countries. In 2015, 77% of the UK’s car production was exported, with the overwhelming majority received by the EU.

The UK is also the EU’s second largest new car market. In 2015 the UK imported more  than

2.2  million cars – with the vast majority coming from other EU Member States. Taking these figures into account, it is clear that the automotive sector will be highly affected by the outcome of the Brexit negotiations. Our goal is to build upon the success story of recent years and minimise the impact of the UK leaving the European Union on our industry.

The Single Market is fundamental to the growth of the European automotive industry and it will remain a key priority for us to maintain and strengthen it to the benefit of all its members.

In light of BREXIT, we would like to highlight the following requests and priorities for the European automotive industry to be considered by the British government and the EU institutions.

Main requests

• Transparency of negotiations between the EU and the UK and timely disclosure of developments
• A stable and predictable overall framework is crucial for investments and trade
• Ensure provisions are agreed that would allow for Single Market Access and the free movement of labour between the EU and the UK
• In the period following the UK’s withdrawal from the EU and ratification of an EU-UK Free Trade Agreement, access and/or membership for the UK within the EU Customs Union and the Single Market should be maintained
• Safeguard continuity in the trading relationship between the EU and the UK
• Maintain shared regulatory and harmonisation priorities
• Continue collaboration on automotive priorities

Priorities

Single Market Access

• Ensure provisions for access to the Single Market including the prevention of tariff and indirect taxes or regulatory barriers being established that would affect the trade of goods, services and skilled labour
• Including the UK within the Customs Union with common customs clearance procedures
• Steps should be taken to support integrated supply chains in both the UK and across Europe

The Single Market allows for full and unrestricted trade in goods and services for the EU and UK automotive industry. Automotive businesses benefit from tariff-free access to the UK market and this should continue without disruption in the transition to a new relationship between the EU and the UK.

Trade

• Ensuring continuity in the trading relationship with the UK
• Alignment of trade priorities and accumulation zones between the EU and the UK for free trade agreements with third countries
• Maintaining the freedom of establishment, including the “single passport” system
• Maintaining the freedom of cross-border investment

The European automotive industry benefits from a number of free trade agreements with third countries. Therefore, the European automotive industry calls upon the EU institutions and the UK government to provide continuity in market access to third countries and to maintain trading benefits from existing and potential future agreements across Europe.

Harmonisation

• Ensuring the consistency of regulations and standards between the EU and the UK, including the continuation of established regulatory framework and mutual recognition of certification

The EU and UK benefit from a system of harmonised and shared regulation concerning the automotive industry. Therefore the establishment of regulatory continuity to avoid a divergence of EU standards is crucial, under the European type approval system.

There are a number of important areas in which the EU and UK should prioritise continuity in a shared regulatory framework:

• Type approval and market surveillance
• Active and passive safety
• Emissions / Euro standards including CO2 and fuel consumption
• End of Life Vehicles (ELV), recycling, REACH and conflict minerals
• Connected and automated driving and data protection
• Intellectual property rights, patents, designs and brands

Continued collaboration on automotive priorities

• Continued  collaboration  on  automotive  priorities,  including  digital,  connectivity and ultra-low emission vehicles
• Shared ambition on key environmental goals including CO2 performance and vehicle emission standards, both in the short term actions and long term roadmaps
• Maintaining the UK’s access to the EU budget for research and development

Collaboration  between  the  UK,  EU  and  Member  States  on  shared  priorities  including emissions, climate change and connected and automated driving should continue, with the UK seen as a strategic partner. Continued collaboration on these projects should be supported by UK funding in addition to the existing EU funding framework.

Free movement of labour

• Guaranteed access to labour across the EU and the UK
• Employment  opportunities  across  the  European  automotive  industry  should  be promoted

There is a wealth of talent in our industry and automotive companies must be able to continue to benefit from the free flow of labour to maintain competitiveness, fill skills gaps and foster economic growth and innovation. Therefore we encourage efforts to maintain the free mobility of labour between the EU and the UK.

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Note to Editors

CLEPA is the European  Association  of  Automotive  Suppliers.  120  of  the  world's  most prominent suppliers for car parts, systems and modules and 23National trade associations and European sector associations are members of CLEPA, representing more than 3 housand companies, employing more than 5 million people and covering all products andservices within the automotive supply chain. Based in  Brussels,  Belgium,  CLEPA  is  recognised  as  the  natural  discussion  partner  by  the  European Institutions, United Nations and fellow associations (ACEA, JAMA, MEMA, etc.).

Facts about the European automotive industry

• Some 12 million people are employed in the European automotive industry
• European automotive suppliers directly employ 5 million people
• European automotive suppliers invest €18bn in RDI per year. They are one of the biggest private investors into research and innovation
• Per year, 16 million vehicles are manufactured in Europe, contributing to the stability and growth of the European economy

For more information, please contact:

Mrs Amalia Di Stefano, CLEPA Acting CEO, Tel.: +32 2 743 91 35 www.clepa.eu