A hard Brexit would put 18,000 German auto industry jobs at risk, Deloitte Germany has said in a report on the sector.26 Jun 2017
The UK is the most important export market for German car manufacturers, with German cars accounting for one in three newly registered vehicles each year. In total, 950,000 of the 3 million new cars in the UK in 2016 were German and these accounted for 20% of German exports, Deloitte said.
A hard Brexit, involving World Trade Organisation (WTO) duties on exports and a predicted 10% devaluation of the pound, would increase the cost of car manufacturing in the UK by a total of €1.9 billion. If that cost increase is passed directly to customers, a car made in the UK will increase in cost by €3,700. However, the cost of a car made in Germany would rise by as much as €5,600, the report said. These price rises would be likely to lead to a 19% drop in car sales and a 32% fall in German vehicle exports, Deloitte said.
Total turnover from vehicles in the UK would decline by around €12.4 billion and for German manufacturers by €6.7 billion. Based on these declines in sales and turnover, Deloitte estimates that 18,000 jobs in the German automotive industry would be endangered.