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Brexit: carmakers step up warnings on impact of uncertainty

A Vauxhall Astra car being assembled at its Ellesmere Port plant
A Vauxhall Astra car being assembled at its Ellesmere Port plant. The company has already announced it will axe about 650 jobs at the plant. Photograph: Bloomberg/Bloomberg via Getty Images

Car manufacturers have stepped up warnings about the impact of Brexit on one of the UK’s key industries, led by suggestions from the owner of Vauxhall that the future of its Astra plant was in doubt.

Jaguar Land Rover also said it could not plan to make electric cars in Britain until the terms of its departure from the EU were clear, as a series of industry executives called for clarity.

Carlos Tavares, chief executive of Vauxhall owner PSA Peugeot Citroen, described the uncertainty as “a big concern” for the French carmaker. PSA has already announced it will axe about 650 jobs at its Ellesmere Port factory, where the Vauxhall Astra is made. It is one of two Vauxhall plants in the UK.

Speaking at the Geneva motor show, Tavares told the BBC: “We cannot invest in a world of uncertainty.

“No one is going to make huge investments without knowing what will be the final competitiveness of the Brexit outcome.”

Tavares said it was “a problem for the whole UK automotive industry”.

The Ellesmere Port plant has been assured by PSA that production of the Astra would continue until 2021 – although Tavares also said the company was not planning redundancies when it bought Vauxhall-Opel from General Motors in 2017.

Tavares said a decision on whether the UK plant could be given more work would have to be made very soon.

Len McCluskey, general secretary of Britain’s largest union, Unite, said Brexit uncertainty “should not be used by Mr Tavares to raise the fear of closure of Ellesmere Port”. He added: “The UK market is vitally important to Peugeot and if he wants to protect that market share he should openly commit to new models in both Ellesmere Port and Luton.”

Jaguar Land Rover said it would need more information on post-Brexit tariffs and trade before it could plan to make electric cars in Britain.

Ralf Speth, chief executive of JLR, Britain’s biggest carmaker, told Reuters a “critical decision” on investment was being held up because of the spectre of customs checks and delays.

JLR has started building a new electric model, the I-Pace, in Austria. The Brexit outcome “makes the decision this year very, very critical and I don’t know whether we can make it”, Speth said.

He added: “Uncertainty is really challenging us very much and not only us, it’s for the complete industry. You hardly see inward investment any more.”

Another major manufacturer, Ford, called for the UK to remain in a customs union after Brexit. Steven Armstrong, Ford’s European president, said: “Any sort of border restrictions or customs friction is going to be an inhibitor to us continuing to transact business as we have done for the last 40 years.

“So we are looking forward to hopefully some sort of customs union, or at least tariff-free trade between the UK and EU.”

Armstrong said Ford would continue to trade in the UK “as long as it remains competitive for us to do business”.

Aston Martin said its business plans were on hold pending Brexit talks, telling Reuters that a possible IPO would be delayed for at least another year, should no deal be reached on a transition period at the EU leaders’ summit in late March.

Industry concerns over tariffs and trade were underlined by a recent report by the Commons business committee, warning that failing to strike a Brexit deal would put hundreds of thousands of jobs at risk as trade barriers would leave UK manufacturers unable to compete with European rivals.

However, Nissan, BMW and Toyota have decided since the 2016 referendum to produce new models at existing UK plants.

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