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UK carmakers offered faint praise for the country’s Brexit deal while warning border chaos will be unavoidable unless governments allow more time to meet new customs-related administrative requirements.
The accord reached last week with the European Union largely addresses the auto industry’s immediate concerns about tariffs, the Society of Motor Manufacturers and Traders said Wednesday. Still, the trade group said the agreement fails to deliver on key demands including regulatory cooperation and customs procedures.
“With no detail or time frame for implementing reform, immediate costs and friction are inevitable,” Mike Hawes, CEO of the trade group, said in a statement calling for a phase-in period that allows businesses to adapt. “Suppliers and manufacturers on both sides will face a significant administrative challenge that will undermine productivity and increase operating costs.”
The SMMT’s request echoes other business groups’ calls for a grace period to meet rules and regulations agreed to on Christmas Eve, days before the Brexit transition takes effect Jan. 1. Keeping the UK’s auto sector connected to the EU with limited trade friction is key because the bloc accounts for about 80 percent of the country’s vehicle exports.
Hawes said the lack of firm commitments by the UK and EU to recognize and cooperate on regulatory standards could delay new products coming to market. He called for the two sides to address this after the Brexit agreement is ratified.