Blog: Brexit: Sharp decline in the German-British trade in cars and motor vehicle parts – Market Research Telecast

Just a few years ago, the trade in cars and motor vehicle parts made up a good quarter of all business between Germany and Great Britain. But since then it has been going steeply downhill. A sharp decline in the auto business in particular has put a heavy burden on the German-British exchange of goods since the Brexit vote.

The “car factor” is an important reason why Great Britain could slip out of the top ten of the most important German trading partners for the first time since 1950, stated the federally owned company Germany Trade and Invest (GTAI) in a study fixed. Since 2016, the year of the Brexit referendum, the exchange of goods in cars and motor vehicle parts has plummeted by an average of 12.3 percent per year. That is more than the overall common foreign trade gave way.

The importance is also shrinking: while cars and motor vehicle parts accounted for more than a quarter (26.7 percent) of the total German-British volume in 2016, it was less than a fifth (18.8 percent) in 2020. The decline affects all sectors of the industry. Since 2016, exports of German new cars have fallen by an average of 14.1 percent annually and new registrations in Great Britain have fallen by an average of 11.8 percent. As a result, German exports almost halved in value between 2015 and 2020 – from 30.4 billion euros to 16.4 billion euros. One reason for the decline is the shift away from combustion engines to alternative drives.

With the phenomenon being accompanied by a collapse in auto production in both countries, it is clear that this is not an isolated UK problem. “However, the lengthy Brexit process acted as a major source of uncertainty in the British automotive industry,” GTAI noted.

The German industry association VDA also emphasizes the enormous challenges posed by Brexit – despite the last minute agreement between Great Britain and the EU on a trade agreement on Christmas Eve 2020. The trade has become “significantly more complicated and therefore more expensive,” said the Association of the Automotive Industry (VDA ) the German press agency with.

There are plenty of examples. “The companies are sometimes confronted with legal uncertainty, as the British customs authorities are often only able to provide information to a limited extent. This is attributed in particular to overload due to the enormous volume of inquiries,” the VDA said. In addition, there are new bureaucratic requirements such as the evidence required for customs exemption and the time required to adapt the IT systems.

“But not only the movement of goods suffers: Now product approvals and certifications that are required twice in the UK mean considerable additional work for companies. EU certifications can only be used in the UK in a very limited time frame until the end of next year,” emphasized the VDA. After all, the consequences of the corona pandemic made things even more difficult – like many industries, the automotive industry had to deal with production downtimes and tense supply chains.

A trend reversal is currently not imminent. The number of newly registered cars in the UK recently fell to a low. The British industry association Society of Motor Manufacturers and Traders (SMMT) announced that September was the weakest in more than 20 years with 215,312 newly registered vehicles. The industry is giving hope, however, to the development of alternative drives. The number of newly registered battery-operated cars reached 32,721 vehicles, its highest monthly level to date, with a market share of 15.2 percent. The British government wants to ban the production of cars with petrol or diesel engines as early as 2030.

(fpi)

Disclaimer: This article is generated from the feed and not edited by our team.

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