A new study has suggested Germany is now on course to lose the UK as one of its top 10 trading partners this year for the first time since 1950, according to research by the state-owned firm Germany Trade and Invest (GTAI). Since the UK voted to leave the EU in 2016, automotive trade between Berlin and London has fallen annually by an average of 12.3 percent, data suggests.
The automotive industry accounted for around 26.7 percent of the total volume of trade between two countries in 2016 – but was reduced to less than a fifth (18.8 percent) in 2020.
Over the past five years, exports of German cars have slumped by an average of 14.1 percent per year and new registrations in Britain have fallen by an average of 11.8 percent.
As a result, German exports almost halved in value between 2015 and 2020 – from €30.4billion to €16.4billion.
The GTAI said: “The lengthy Brexit process acted as a major source of uncertainty for the British automotive industry.”
It also noted the industry has taken a hit from new Green policies as carmakers move away from combustion engines.
The UK and European Union agreed a Trade and Co-operation Agreement in December 2020.
The German Association of the Automotive Industry (VDA) has said the deal has made trade “significantly more complicated and therefore more expensive”.
It also highlighted the additional EU red tape required for firms to export goods.
The VDA said: “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 can in particular be attributed to overload due to the enormous volume of inquiries.”
It added: “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.
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“EU certifications can only be used in the UK for a very limited time frame until the end of next year.”
The new trading relationship and the phasing out of fossil fuel-powered cars has also been felt in the UK.
In September, the British industry association Society of Motor Manufacturers and Traders (SMMT) said 215,312 new vehicles were registered in the UK.
The figure was the lowest in more than 20 years.
However, the transition away from petrol and diesel engines was evident as the number of newly registered battery-powered cars reached a new high of 32,721.
The Government has said a ban on the sale of new petrol and diesel cars will come into force in 2030.
Additional reporting by Monika Pallenberg