Against the backdrop of a rising second wave of COVID-19 across Europe, the automotive industry has been deep in negotiations. Representatives from the European Union (EU) and UK Government have been attempting to thrash out a deal on its future relationship, with the transition period due to come to a close at the end of December.
The talks have been nothing if not contentious. As a recent BBC article states, the EU is on the cusp of rejecting the UK’s request for special allowance for exports of electric cars.
Crucially, “electric and hybrid cars will only get zero tariffs if a majority of the parts’ value is from the two areas”, i.e. the EU and UK.
For the UK, the knock-on effect is significant as it will result in tariffs of 10% applying on a number of car exports to the EU from January 2021. Manufacturers based in the UK had hoped they could secure a deal where zero tariffs would apply, even if only a minority of parts were from the UK or EU, with up to 70% coming from elsewhere.
While the respective negotiators have failed to reach an agreement that pleases both sides, there does appear to be unanimity across the industry – with the European Automobile Manufacturers Association and the UK-based Society of Motor Manufacturers and Traders calling for a Free Trade Agreement that protects the competitiveness of the industry on both sides.
In the UK, however, manufacturers are likely resigned to facing higher costs on exports from January. With their pockets already being hit hard by COVID, it is a distressing period. However, it is imperative that manufacturers continue to place a significant emphasis on safety during this time.
While some will be looking to cut costs in the months and years ahead, safety is one area in which compromise is not an option. The price of failing to put safety first cannot be calculated – and in an industry that prides itself on the care it takes with its products, we are sure this will remain the case even in what is likely to be a tumultuous operating environment.