Free-trade agreement needed for UK car industry’s survival, says Ford

Published 24 June 2020

With multiple challenges looming over the future of the UK's automotive industry, Ford chairman, Graham Hoare, says a free-trade agreement with the EU is crucial to ensure survival for carmakers in the UK.

"A free-trade agreement is necessary for the viability of our businesses. We’re putting huge amounts of investment into an electric future. We’re embracing digital activities, which is another burden", said Hoare at the SMMT International Automotive Summit held on 23 June.

The statement comes roughly a month after Ford called for help from the Government in order to survive the coronavirus outbreak, and follows news that new car registrations sank 89 per cent to the record-lowest May for vehicle sales since 1952.

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The SMMT says that car and light commercial vehicle production volumes are expected to fall by a third in 2020 as a result of the coronavirus outbreak. The trade association claims that, with a tariff-free deal in place, full recovery is predicted to take up to five years, with output reaching pre-crisis levels of 1.35 million units by 2025.

However, it said a no-deal scenario would severely damage these prospects, resulting in volumes falling below 850,000 by 2025 – the lowest level since 1953. This would mean a £40 billion cut in revenues, on top of the £33.5b cost of pandemic-related production losses.

Ford Focus Factory

Nadhim Zahawi, Minister for Business and Industry, said: "The UK is a significant importer of vehicles [to Europe]. Avoiding tariffs should be crucial for both sides. Alongside that, we’ve already agreed deals with Switzerland, South Korea and South Africa, and we’re continuing discussions with others such as Japan and Turkey. We’re committed to removing tariffs with partners and negotiating free-trade agreement with the EU.”

Zahawi also announced £78 million of grant funding for the UK automotive industry, which aims to help businesses develop green automotive technologies.

"Brexit is still the biggest threat to the long-term future of the industry. The challenges to this industry: COVID, Brexit, electrification, autonomy - these are all happening at once and the scale of change is unprecedented", said Society of Motor Manufacturers and Traders (SMMT) chief executive Mike Hawes.

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Comments

Falkirk Bairn    on 25 June 2020

Why should the UK taxpayer subsidise Ford factories in Germany, Spain & Rumania?

Yes Ford make engines & gearboxes in the UK but shipped UK Transit jobs to Turkey.

Currently Nissan, Honda, Toyota, Vx & JLR build some of their cars in the UK - I would prefer to support UK manufacturing jobs.

Plodding Along    on 29 June 2020

As a U.S company they should ask Trump to help them out and, you know, make America great again - I mean, keep America great...

Geoff Went    on 29 June 2020

The government's are at fault here either red or blue because unlike Germany if you want t to move jobs you have to fund the welfare bill which is very expensive in Germany. What has the UK done over many years made a massive contribution to the company profits via the tax payer. If we had the same rules we would still have a healthy manufacturing base no matter what the commodity

Johnno431    on 29 June 2020

Ford have been ripping off the private motorist for decades by slashing prices (and residuals) for fleet deals while overcharging private buyers
On top of that they abandoned their car manufacturing plants in the UK in favour of cheap countries incentives !.
Now they expect us, as taxpayers, to pour money into their company.
In the event of a no deal the cars they now produce in Europe will be hit with a 10% price rise which is maybe what’s upsetting the Ford guy.
Tough !

Ian Basford    on 29 June 2020

Ford sells the two most popular models here but decided to move all their considerable car production overseas. Go get some help from turkey, Germany, Spain.

conman    4 days ago

How can this country ever get its manufacturing industry back when the government is going to subsidise foreign car makers to the tune of £6000 British tax payers money. the likes of, VW, BMW, CITROEN, PEUGEOT, RENAULT, SKODA, KIA, HYUNDIA must be laughing all the way to the bank with their sales of EV vehicles. In this country me only produce ICE vehicles( with the exception of a couple ) so unless EV manufacturers start to invest in the UK we are dead in the water. How stupid are our great British politicians and when Vauxhall and Nissan and Toyota shut their factories here all we will get is 'we need money to help support the 1,000's that have lost their jobs'. Politicians, not an ounce of common sense or business sense between them. Their policy has been sell everything off to foreign countries then sit back as slowly they steal our ideas and inventions then close the factories down.
But don't forget to build loads of McDonald's, Costas, Subways, etc etc so that our young people can have a bright future and also throw in zero hours contracts . Well done politicians.
The above article stated that Ford will have to pay 10% tax when we leave the UK , no problem as we will be giving them £6000 towards the price of their cars.

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