Sunak must not ignore threat from car manufacturers - expert
A leading political economist and authority on the car industry has warned that the UK government 's failure to ignore the danger of major car manufacturers moving production abroad as a result of Brexit will lead to further decline in the British economy.
Professor Alex de Ruyter, director of the Centre for Brexit Studies at Birmingham City University, and author of multiple research papers on the automotive supply chain, shared his concern following a submission to Parliament by car giant Stellantis which suggests it could relocate after the UK 's departure from the EU has led to a competitive disadvantage.
US carmaker Ford has echoed concerns, releasing a statement 'calling for current trade requirements to be extended to 2027, to allow time for the battery supply chain to develop in Europe and to meet EV demand. '
Professor de Ruyter (pictured) said: “The recent warning by Citroen, Fiat, Peugot and Vauxhall owner Stellantis that it could abandon UK production of Vauxhall cars should serve as a wake-up call to the Government and the Opposition that Brexit isn 't working and cannot be made to work given the trade barriers that leaving the EU has thrown up.
Stellantis ' statement to an enquiry into electric vehicle (EV) production in the UK cited cheaper battery costs from Europe and China, and the potential for tariffs on UK-produced EVs under new legislation.
Sir Keir Starmer, leader of the Labour party, this week said he would look to renegotiate elements of the trade deal with Europe to encourage economic growth.
“It is all very well for Keir Starmer to say that Labour “wants a closer working relationship ” with the EU but continuing to rule out Single Market membership means the onus is on him to spell out exactly what this would be - for example a Swiss-style approach of sector-specific bilateral agreements ”, said Professor de Ruyter.
“Whilst Labour - perhaps understandably - are keen to avoid being pinned down on their Brexit stance, they will come under increasing pressure to do so in the lead-up to a General Election ”,
“With polling evidence suggesting that voters increasingly see Brexit as a mistake, and that Labour 's predicted vote would increase were they to call for re-joining the Single Market, I would suggest that it 's time to bite the bullet and make the case. ”
Last year, the academic co-authored a key research report into 'Gigactories ' which showed that proposals to open the UK 's largest electric vehicle battery production facility would expose a 'marked gap ' in the national supply chain.
Growth in EV battery production in the Midlands, including the creation of a major new electric battery factory on the site of Coventry Airport are reported to have been hampered by manufacturer Britishvolt entering administration earlier this year, alongside an Jaguar Land Rover owner Tata that they would not be producing batteries at the Coventry Airport site either.
Professor de Ruyter cautioned further turbulence could lie ahead for the country 's car industry and supply chain.
The academic said: “More generally, the UK is in real danger of falling behind in terms of EV production. This due to the UK 's high energy costs compared to EU rivals, a lack of capacity in the EV supply chain and the lack of a proper place-based industry policy that recognises the importance of original equipment manufacturers (OEM) in the automotive “ecosystem ”.
“Firms such as Jaguar Land Rover act as anchor employers in the geographic areas they operate within, so there is an impetus to be made for the UK Government to take an equity stake in firms such as JLR, which are national strategic assets, due to the R&D they undertake and potential to boost productivity and skilled employment.
“With the US and EU throwing billions at EV production - particularly battery production - anything less than substantial assistance from the UK government will most likely see production shift to the US and Europe. ”