LONDON: Stellantis, one of the globe’s biggest carmakers, has called on the United Kingdom (UK) government to renegotiate part of the Brexit deal or risk losing parts of its car industry.
According to the BBC, Stellantis, which makes Vauxhall, Citroen, Peugeot and Fiat, had committed to making electric cars in the UK, but it has now said it can no longer meet Brexit trade rules on where parts are sourced.
A spokesperson said the government was “determined” that the UK will remain competitive in car manufacturing. Stellantis called on the government to agree with the EU to keep rules as they are until 2027. It also wants to review arrangements for manufacturing parts in Serbia and Morocco.
Just two years ago, the globe’s fourth biggest carmaker said the future of its Ellesmere Port and Luton plants was secure. But Stellantis has asked the United Kingdom government to renegotiate part of the Brexit deal amid the “threat to our export business and the sustainability of our United Kingdom manufacturing operations.”
In a submission to the Commons inquiry into electric vehicle production, the firm said its United Kingdom investments were based on meeting the strict terms of the post-Brexit free trade deal.
These rules state that from next year, 45% of the electric car’s value should originate in the UK or EU to qualify for the trade without tariffs.
Stellantis said it was “now unfit to meet these rules of origin” after the surge in raw materials costs during the covid and energy issues.
It said that if the government can’t agree to keep the current rules until 2027, from next year, “trade between the United Kingdom and EU would be subject to 10% tariffs.”
It said this would make domestic production and exports uncompetitive compared to South Korea and Japan.
Stellantis said, “To reinforce the sustainability of our manufacturing plants in the UK, the United Kingdom must consider its trading arrangements with Europe.” A government spokesperson said Business and Trade Secretary Kemi Badenoch “has uplifted this with the EU.”
The spokesperson said Badenoch “is determined to ensure the United Kingdom remains one of the best locations globally for automotive manufacturing, especially as we transition to electric cars.”
The government has set up the fund to develop the supply chain for electric cars and, in the coming months, would take “decisive action to ensure future investment in zero-emission vehicles manufacturing,” the spokesperson added.
