One of the world's major car manufacturers, Stellantis, which owns Vauxhall, Peugeot, Citroen, and Fiat, has issued a warning that it may need to shut down its UK
factories unless the government reopens negotiations on the Brexit deal.
Stellantis had previously committed to producing electric cars in the UK but now faces the possibility of incurring 10% tariffs on exports to the EU due to regulations concerning the sourcing of parts.
In response to these concerns, Prime Minister Rishi Sunak affirmed his support for Brexit and listed various "Brexit benefits" introduced during his tenure as Chancellor. However, he did not directly address Stellantis' specific worries. A government spokesperson expressed determination to maintain the competitiveness of UK car manufacturing.
While this is the first time a car company has openly called for a renegotiation of the Brexit trade deal, it is understood that all major manufacturers in the UK have raised similar concerns with the government.
Stellantis warned that if the cost of manufacturing electric vehicles in the UK becomes uncompetitive and unsustainable, it will be forced to close its operations. The car manufacturer is urging ministers to reach an agreement with the EU to maintain existing rules until 2027, and it also seeks a review of arrangements for manufacturing parts in Serbia and Morocco.
In response to Stellantis' plea, Labour leader Sir Keir Starmer emphasized the need for "a better Brexit deal" to ensure the continued operation of companies like Vauxhall in the UK.
The Business and Trade Secretary, Kemi Badenoch, held a virtual meeting with senior executives from Stellantis, which was described as "constructive." Discussions with the EU have left them "cautiously optimistic" about the recognition of the mutual benefits of a deal.
The UK government spokesperson stated that decisive action would be taken in the coming months to secure future investments in zero-emission vehicle manufacturing. However, Labour's shadow business secretary, Jonathan Reynolds, criticized the government's handling of the situation, stating that car makers have been let down by a "government in chaos" and emphasized the need for urgent action. Photo by 42-BRT, Wikimedia commons.