Carmakers demand Brexit talks tackle auto anxieties | Business| Economy and finance news from a German perspective | DW | 19.03.2018
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Carmakers demand Brexit talks tackle auto anxieties

As negotiations for Britain's exit from the EU are dragging on, European carmakers are calling for clarification of issues affecting their sector, including type approval procedures and emissions targets.

The European Automobile Manufacturers' Association (ACEA) on Monday called for Brexit negotiators to avoid potential cross-border chaos by maintaining an existing system of mutual recognition of auto certification issued by UK and EU authorities.

The ACEA said mutual EU-UK recognition of each other's vehicle approvals post-Brexit would only be possible if the UK remained fully aligned with all relevant EU legislation, an issue that has split the UK side as it prepares for upcoming Brexit talks focused on trade.

Read more: EU warns of post-Brexit trade 'frictions,' rejects UK ambitions for unique trade deal

"Otherwise we will see severe land and sea-port congestion at both sides of the channel once the UK leaves the EU," ACEA Secretary General Erik Jonnaert said.

"It is essential that manufacturers can maintain valid type approvals in both the EU and the UK as of 30 March 2019, no matter where the approval was issued," Jonnaert said. "We are therefore calling on the European Commission to clarify how existing approvals can be transferred from an EU27 authority to the UK, and the other way around."

European Community Whole Vehicle Type Approval is the certification issued by a member state's Type Approval Authority (TAA) that a motor vehicle made within its borders meets EU environmental, safety, performance and security standards. A holder can use it to market that type of vehicle throughout the EU, without further certification in any EU member state.

EU chief Brexit negotiator Michel Barnier (R) with British Secretary of State for Exiting the EU, David Davis, shaking hands following their talks

EU chief Brexit negotiator Michel Barnier (R) with British Secretary of State for Exiting the EU, David Davis are said to have reached a Brexit transition deal on Monday, March 19

Frictionless trade

"The UK deciding to remain in a customs union with the EU would of course be an effective solution to enable frictionless trade in goods between the EU and UK," Jonnaert said, adding that regardless of which Brexit scenario is pursued, it is essential that EU and UK authorities start preparing to simplify customs procedures.

The imposition of tariffs — 10 percent for passenger cars and 10 percent or 22 percent for commercial vehicles — in the event of a so-called 'cliff-edge' Brexit would be "extremely burdensome" for automobile manufacturers and consumers.

Britain is due to leave the EU at the end of March 2019 and EU leaders are set to approve an outline for future negotiations with Britain at a summit later this week.

Commuters driving to work in Gelsenkirchen

The EU will have an emissions problem once Britain's more environmentally-friendly car fleet will no longer be counted for its CO2 reduction target

CO2 emissions: UK in or out?

The ACEA also called for clarification as to whether the UK car market — the second biggest in the EU — will count in calculating the EU's 2021 carbon dioxide (CO2) targets.

EU legislation sets mandatory CO2 emission reduction targets for new passenger cars and light commercial vehicles and the ACEA believes that after the UK leaves the EU it will not be subject to EU emission requirements.

The association said compliance with "the highly challenging limits" set by the EU for 2021 is based on data from all member states and that potential exclusion of any country would "have a significant impact on those carefully planned strategies."

UK data is valuable to manufacturers because of the high proportion of alternatively-powered vehicles registered. In 2016, the UK accounted for 16 percent of battery-electric vehicles and 31 percent of all plug-in vehicles sold in the EU.

Removing UK data from the calculation would oblige manufacturers to recalculate average targets based on EU28 data and give only a limited time to alter compliance strategies to ensure that the 2021 targets are reached, the association said.

If the European Commission decided to exclude UK data from fleet-average calculations the Commission would have to review the target of 95g CO2/km for passenger cars, the ACEA said.

EU sales up excluding UK

In 2017, sales of new cars in the EU surpassed 15 million for the first time since 2007, with 15.1 million vehicles sold in the 28-member bloc, up 3.4 percent on 2016, the ACEA said.

Demand for new cars rose in all major EU markets except in Britain, where sales fell by 5.7 percent year-on-year, the first annual decline in six years, according to ACEA data.

Car sales' growth across the EU was likely to slow to 1 percent in 2018, the ACEA said in January, noting stricter rules on car emissions and Brexit as threats to the industry.

The ACEA has forecast that German and French car sales' growth will be subdued in 2018 and that the British car market would drop by 4-5 percent.

ACEA President Carlos Tavares blamed the slowdown on new EU CO2 emissions regulations and a lack of market predictability caused by Britain's exit from the bloc.

He said the auto industry believed the transition period after Britain leaves the EU should be three years longer than the 21 months - until the end of 2020 - that the EU has proposed.

jbh (AP, dpa, Reuters)

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