The European Union's 'Made in Europe' regulations pose a significant threat to the UK's automotive industry, with British manufacturers at risk of being shut out from their largest export market. The proposed rules, drafted under the Industrial Accelerator Act (IAA), stipulate that vehicles and components must be manufactured within the EU to qualify for subsidies or public procurement contracts, potentially excluding UK-based producers from lucrative contracts worth an estimated £100 billion annually.
The European Automobile Manufacturers Association (Acea) has made a direct appeal to Brussels, requesting 'justified, targeted exemptions' for the UK, alongside Turkey and Morocco. This move comes as Britain's Europe affairs minister, Nick Thomas-Symonds, met with EU trade commissioner Maroš Šefčovič on Wednesday to discuss progress in UK-EU relations, including the IAA's impact on the automotive sector.
Acea has emphasised the deeply integrated nature of the automotive value chain between the EU and the UK, with 70% of vehicles produced in Britain being exported to Europe. Industry experts warn that these regulations could become one of the most significant economic repercussions of Brexit for British manufacturers, potentially resulting in job losses and factory closures.
Major carmakers operating in the UK, including BMW, Volkswagen, Stellantis (Mini, Bentley, Vauxhall), JLR, Ford, and Toyota, have raised concerns about the potential impact on their supply chains. Nissan has reportedly indicated privately that its Sunderland factory could face closure if the rules are implemented without modification, highlighting the sector's reliance on EU markets.
The UK-EU automotive trade is a significant contributor to both economies, with 55% of all UK car exports destined for the EU. Acea's backing from influential industry players is expected to bolster the UK's position in ongoing negotiations with the EU to mitigate potential damage and secure exemptions or modifications to the IAA.