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UK Manufacturers Could Lose Up to £800 Million If Approval Framework Doesn’t Suit UK Terms
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The Brexit vote on 23 June 2016 is considered by many to beginning of UKs slowdown in the world economy. By what is considered to be the UK ‘shooting itself in the foot’, the UK has to construct an exit plan that will enable it to leave the European Union without causing further damage to its economy. This study talks about what the potential scenarios could be, leading up to the UK exiting the EU. These are considered as:• Comprehensive Economic and Trade Agreement (CETA) • No deal (bringing in WTO tariffs)• Soft brexit, also known as Chequers termsThe study talks about what each of these trade agreements means to the UK in terms of duties on goods and services, effects on labour, customs checks, and procurement.It further analyses what each of these deals would mean to the automotive industry in the UK, and also in the EU considering that it is the UK’s single largest export market. Its compares between the three scenarios mentioned in terms of:• Changes in certification due to different EU and UK regulations• Customs inspection now that there will be a border• Rules of origin of both parts and vehiclesTo full understand how Brexit is going to impact the UK automotive market, different scenarios are presented:• New car registrations: given that the best-selling and most of the vehicles sold in the UK are made in the EU, how will the aforementioned scenarios impact this? Is there going to be any future change in terms of sales in terms of rebounding? • Production: how are new tariffs, either under the hard or soft Brexit deals going to impact production in the UK, of cars, commercial vehicles and parts? The report talks about what the changes are going to be in terms of labour in the market, considering that a significant portion of it comes from the EU mainland. • Investment: the UK was considered to be a choice for strategic and safe investments, both in terms of production and development. Now that it is going to be separate from the EU, what does this do to the economy and how much is the investment going to decrease going forward? The report also details the impact Brexit is going to have on the automotive aftermarket industry. Given the huge amount of parts and services that are both imported and exported between the UK and the EU, a soft Brexit deal is critical to the continued successful functioning of this trade. The report also discusses how much this is going to cost the end customer and businesses in the aftermarket trade, especially suppliers who manufacture the parts and installers that service end customers vehicles.
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