While Toyota, BMW and Nissan are talking about what they are planning for a post-Brexit car industry, PSA Group, who purchased Vauxhall-Opel in 2017, pre-empted any Brexit issues and axed 650 jobs at the Ellesmere-based plant at the beginning of the year.
At the Geneva Motor Show in March this year, Carlos Tavares, the CEO of PSA Group acknowledged that the loss of freedom of movement would have an impact on production and affect the sustainability of their two manufacturing plants in the UK, in Luton and Ellesmere Port. He also said that PSA Group could not “invest in a world of uncertainty”. A month later, in April, Tavares visited their Luton plant where he announced PSA Group’s plans to increase output to 100,000 vehicles per year at their Luton plant, this announcement also included plans for the new Vivaro van to be built in the UK from 2019.
Despite the positive announcement about investment in the UK from Tavares in April this year, at the Paris Motor Show, Maxime Picat, the European Operational Director of PSA Group said that there were limits to what they are able to do post-Brexit, fear over the additional cost implications that switching to the World Trade Organisation terms is a huge concern, “If we suddenly have to start manufacturing for the UK in the UK, and Europe in Europe, there will necessarily be an impact on production”.
Carmakers like Toyota, Nissan and BMW that trade regularly with the EU and UK need free trade to stay in place. The introduction of the WTO 10% levy on goods would be devastating to some businesses and cause others to seriously consider their position within the UK. While, for the most part, the focus remains on issues that the UK will experience once we leave the EU, car manufacturers acknowledge that both sides of the negotiations will experience complications when shipping goods if the UK loses free trade.