Brexit could spell bad news for European car-makers

Global Business

British Prime Minister Theresa May’s key Brexit speech on Tuesday made it clear Britain will be leaving the single market, and its current arrangements with the EU customs union.

That could potentially spell bad news for multinational industries like cars, one of Europe’s biggest exports to Britain.

CGTN’s Elena Casas reports from Brussels. Follow Elena Casas on Twitter @ElenacMontanez

Brexit could spell bad news for European car-makers

Brexit could spell bad news for European car-makers

British Prime Minister Theresa May’s key Brexit speech on Tuesday made it clear Britain will be leaving the single market, and its current arrangements with the EU customs union. That could potentially spell bad news for multinational industries like cars, one of Europe’s biggest exports to Britain.CGTN’s Elena Casas reports.
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Germany’s car manufacturing giants according to leading supporters of Britain’s vote to leave the EU, pressure from companies like this, who want to keep selling cars in Britain, will help Britain get a good deal with the EU.

Prime Minister Theresa May said she believes Britain will continue to trade freely with the rest of Europe – outside the single market.

But car makers here are worried.

This is a cross border industry where a German car sold in the U.K. often contains parts made in France and Britain – that may have crossed the Channel several times before the finished car reaches a garage forecourt.

The U.K.’s is Mercedes’ biggest market in Europe – and the firm fears tariffs could mean higher prices and thus lower sales.

Theresa May has suggested a post Brexit Britain could drive off into the sunset and leave the single market behind – but she hinted that some industries, like cars, might be so important they could get special treatment.

Many in the industry say they’re confident British negotiators won’t want the automotive trade to suffer.

85% of cars sold in Britain are imported from Europe – and the fall of the pound has already increased prices, leaving analysts predicting car sales in the UK will fall at least 5 per cent in 2017.