26 Jun 2017, 2:55 pm
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.