Brexit Discussion Thread VI

Zubeneschamali

Capt'n Midnight wrote: »

So realistically the UK is looking at having to do multiple FTA's with countries that take 1% or less of their car exports.

Realistically, there won't be any volume car manufacturing in the UK in 10 years. Some racing-related stuff, high end, specialized. Some "bespoke" Aston martins and such, too, where prices are already insane, to keep the Union Jack on them.



But the Japanese, PSA, BMW, Land Rover and so on will move volume production elsewhere over a model cycle or two. If the English government bribes them enough, they might make some Right Hand Drive cars for the UK and Ireland there.

Capt'n Midnight

Sam Russell wrote: »

5. The UK port of Ramsgate cannot handle RORO ferries currently. Dredging will be required, which has not happened.

oddly enough

Dredging began on Thursday morning, with a Dutch company brought in to complete the work.

ThePanjandrum

road_high wrote: »

Most of the uk car makers are specifically geared towards supplying the market on their doorstep- even more so the JIT component industry is based completely on EU membership and free market access.
Cars are built in England using EU parts, sold in the EU. Vice versa the same. This is but one example of the potential self damage of the Brexit madness.

No, the component industry is not based completely on EU membership, components come from all around the world including China, Japan. India and the USA to give examples.

One of the likely effects of Brexit is that more component production will move to Britain for better provision of vehicle parts. The UK motor industry might well grow - despite what the British government gets businesses to say in an attempt to remain in some kind of Customs Union.

Capt'n Midnight

Zubeneschamali wrote: »

Realistically, there won't be any volume car manufacturing in the UK in 10 years. Some racing-related stuff, high end, specialized. Some "bespoke" Aston martins and such, too, where prices are already insane, to keep the Union Jack on them.

The one industry the UK will likely keep is Jet Turbines, but mainly because maintenance contracts for aircraft can easily be 20 years and Rolls Royce are sitting on a pile of investments. So won't be affected as much by short term changes.

Car sales have fallen in the UK. The value of Sterling has fallen too. And there are lots of deals and scrappage offers to get punters back. Margins have fallen. The UK is far less valuable to the German car makers than it used to be.

Just like the way that exports to the UK only comprise 6% of our GDP.

I've posted before about VW having an overall profit margin of 4%.
- this means they can't be making much in the UK at the moment,
- also means that a 10% WTO tariff would decimate the UK industry

Sam Russell

Capt'n Midnight wrote: »

oddly enough

Dredging began on Thursday morning, with a Dutch company brought in to complete the work.

Dredging might allow ships into the port, but the berths are too narrow for most ships that are required. The UK Gov has said no payments will be made before the service operates.

When will the investigations begin on the awarding of this contract?

Leroy42

ThePanjandrum wrote: »

No, the component industry is not based completely on EU membership, components come from all around the world including China, Japan. India and the USA to give examples.

One of the likely effects of Brexit is that more component production will move to Britain for better provision of vehicle parts. The UK motor industry might well grow - despite what the British government gets businesses to say in an attempt to remain in some kind of Customs Union.

So you think companies will set up component factories in the UK in order to ship the parts back to the EU? Or do you think they will do so to use them in manufacturing the cars in the UK for shipment to EU?

Under No Deal both of these will attract tariffs, Why wouldn't they simply leave the component factories where there are and move the vehicle manufacturing?

But either way, I guess both of us or simply thinking what may or may not happen, and both or neither of us may be right. But it seems quite a gamble for a whole country to take on based on nothing but hope.

Podge_irl

ThePanjandrum wrote: »

One of the likely effects of Brexit is that more component production will move to Britain for better provision of vehicle parts. The UK motor industry might well grow - despite what the British government gets businesses to say in an attempt to remain in some kind of Customs Union.

And sell them to where exactly?

Leroy42

Sam Russell wrote: »

Dredging might allow ships into the port, but the berths are too narrow for most ships that are required. The UK Gov has said no payments will be made before the service operates.

When will the investigations begin on the awarding of this contract?

Grayling also says in the interview that the ships are not due into service until April, to which the interviewer expressed surprise since leave date was end of March and most people would have expected the services to be up and running.

So even their own planning means they won't be ready

listermint

Leroy42 wrote: »

Grayling also says in the interview that the ships are not due into service until April, to which the interviewer expressed surprise since leave date was end of March and most people would have expected the services to be up and running.

So even their own planning means they won't be ready

And then says march after he is pressed.

He was making it all up on the spot

Clueless

ThePanjandrum

Leroy42 wrote: »

So you think companies will set up component factories in the UK in order to ship the parts back to the EU? Or do you think they will do so to use them in manufacturing the cars in the UK for shipment to EU?

Under No Deal both of these will attract tariffs, Why wouldn't they simply leave the component factories where there are and move the vehicle manufacturing?

But either way, I guess both of us or simply thinking what may or may not happen, and both or neither of us may be right. But it seems quite a gamble for a whole country to take on based on nothing but hope.

Look what happened when Trump threatened the EU over auto tariffs, the EU suddenly decided that it was prepared to scrap tariffs if the USA did the same with its much lower tariffs. The UK is also a huge market for EU vehicles, for instance with Mercedes Benz I believe the UK is the fourth largest market in the world - and one of those other markets is Germany.

The EU has to be asking itself what the implications would be if it is faced with 10% tariffs whilst Asian and US manufacturers are tariff free. I'm not trying to say this as a threat but the consequent losses would be huge.

Finally, I've just been reading about Ineos new vehicle which will be on sale in 2020 and which will probably be built in the UK, possibly at Bridgend in Wales. Autocar says of the project:

Ineos is still keen to start production in the UK, despite uncertainty over the automotive industry in the country following the Brexit vote.

“We’ve gone into this decision with eyes wide open,” Crotty said when asked about Brexit's impact. “It really doesn’t have an impact. We think this is a project for the UK that would be hugely beneficial post-Brexit, because we would be exporting 70-80% of the cars we would make."

Ineos is targeting sales of around 25,000 units per year. The company has previously outlined its vision for the 4x4 to be sold globally, but particularly targeting the US, sub-Saharan Africa and Europe. Prices are set to stick closely to those of the outgoing [Land Rover] Defender, which was priced from £25,000.

ThePanjandrum

Podge_irl wrote: »

And sell them to where exactly?

Worldwide, including the EU. We already sell Nissans to Japan.

Anthracite

ThePanjandrum wrote: »

Look what happened when Trump threatened the EU over auto tariffs, the EU suddenly decided that it was prepared to scrap tariffs if the USA did the same with its much lower tariffs. The UK is also a huge market for EU vehicles, for instance with Mercedes Benz I believe the UK is the fourth largest market in the world - and one of those other markets is Germany.

The EU has to be asking itself what the implications would be if it is faced with 10% tariffs whilst Asian and US manufacturers are tariff free. I'm not trying to say this as a threat but the consequent losses would be huge.

I might be missing your point here but the UK is not the EU and it certainly is not the USA. The UK is not in a position to threaten anything. What percentage of UK-assembled cars are sold in the EU? What percentage of EU-manufactured cars are sold in the UK?

And so on and so forth for every product you can name.

Bigus

ThePanjandrum wrote: »

Look what happened when Trump threatened the EU over auto tariffs, the EU suddenly decided that it was prepared to scrap tariffs if the USA did the same with its much lower tariffs. The UK is also a huge market for EU vehicles, for instance with Mercedes Benz I believe the UK is the fourth largest market in the world - and one of those other markets is Germany.

The EU has to be asking itself what the implications would be if it is faced with 10% tariffs whilst Asian and US manufacturers are tariff free. I'm not trying to say this as a threat but the consequent losses would be huge.

Finally, I've just been reading about Ineos new vehicle which will be on sale in 2020 and which will probably be built in the UK, possibly at Bridgend in Wales. Autocar says of the project:

Ineos is still keen to start production in the UK, despite uncertainty over the automotive industry in the country following the Brexit vote.

“We’ve gone into this decision with eyes wide open,” Crotty said when asked about Brexit's impact. “It really doesn’t have an impact. We think this is a project for the UK that would be hugely beneficial post-Brexit, because we would be exporting 70-80% of the cars we would make."

Ineos is targeting sales of around 25,000 units per year. The company has previously outlined its vision for the 4x4 to be sold globally, but particularly targeting the US, sub-Saharan Africa and Europe. Prices are set to stick closely to those of the outgoing [Land Rover] Defender, which was priced from £25,000.

From the Ineos Automotive website

"INEOS Automotive’s next job is to find a suitable manufacturing site, which could be in the UK or mainland Europe. INEOS has already begun recruiting.

Podge_irl

ThePanjandrum wrote: »

Worldwide, including the EU. We already sell Nissans to Japan.

That would be because Japan has 0% tariffs on automobiles. The EU has 10%.

First Up

ThePanjandrum wrote:

Worldwide, including the EU. We already sell Nissans to Japan.

Nissan sells Nissans to Japan.

prawnsambo

ThePanjandrum wrote: »

The EU has to be asking itself what the implications would be if it is faced with 10% tariffs whilst Asian and US manufacturers are tariff free. I'm not trying to say this as a threat but the consequent losses would be huge.

I don't know how you're coming up with those numbers. For a start, until the UK [eventually] agree a FTA with the US, they will be operating on the same tariff regime as the EU. And that happens in the case of a crash out as well, since the UK has just copied the EU's schedule. If the UK decide to drop tariffs on vehicles unilaterally, that's fine, but will have to do that for everyone including the EU.

ThePanjandrum

Anthracite wrote: »

I might be missing your point here but the UK is not the EU and it certainly is not the USA. The UK is not in a position to threaten anything. What percentage of UK-assembled cars are sold in the EU? What percentage of EU-manufactured cars are sold in the UK?

And so on and so forth for every product you can name.

According to the German association of the automotive industry, in 2017 the country exported 769,000 cars to the UK, its single largest export market. The US came second with 494,000 cars. German carmakers also export 258,000 German-made vehicles to China. So for German made cars the UK buys more cars in a year than the second and third largest market combined.

But I accept your superior knowledge, the German motor industry will not be concerned by that at all.

Hurrache

And tomorrow we'll be finding out water is wet

https://www.huffingtonpost.co.uk/entry/theresa-may-suffers-major-blow-as-dup-refuses-to-back-brexit-deal_uk_5c2e3b0ee4b05c88b70702ac

Theresa May’s hopes of winning DUP support for her Brexit deal have been dealt a blow after the party demanded significant changes – which the EU is already refusing to allow.

After two days of talks with the prime minister and other senior government figures, the DUP on Thursday revealed it will still refuse to back the deal in its current form.

https://twitter.com/NigelDoddsDUP/status/1080849835438362624?s=19

And their farming constituents I'm sure are standing firmly behind them
https://twitter.com/Channel4News/status/1080891694881665026?s=19

ThePanjandrum

prawnsambo wrote: »

I don't know how you're coming up with those numbers. For a start, until the UK [eventually] agree a FTA with the US, they will be operating on the same tariff regime as the EU. And that happens in the case of a crash out as well, since the UK has just copied the EU's schedule. If the UK decide to drop tariffs on vehicles unilaterally, that's fine, but will have to do that for everyone including the EU.

EU tariffs are 10% which will be the UK's WTO schedule figure. But the UK is a vast market for motor vehicles and can use these purchases as a bargaining chip with other countries under limited or full FTAs and can reduce the tariffs under such agreements to 0% if it wishes.

blanch152

ThePanjandrum wrote: »

Look what happened when Trump threatened the EU over auto tariffs, the EU suddenly decided that it was prepared to scrap tariffs if the USA did the same with its much lower tariffs. The UK is also a huge market for EU vehicles, for instance with Mercedes Benz I believe the UK is the fourth largest market in the world - and one of those other markets is Germany.

The EU has to be asking itself what the implications would be if it is faced with 10% tariffs whilst Asian and US manufacturers are tariff free. I'm not trying to say this as a threat but the consequent losses would be huge.

As I understand it, under WTO rules, the UK would have to operate the same tariffs for all countries, so the EU would not be under any disadvantage.

Nody

ThePanjandrum wrote: »

Look what happened when Trump threatened the EU over auto tariffs, the EU suddenly decided that it was prepared to scrap tariffs if the USA did the same with its much lower tariffs. The UK is also a huge market for EU vehicles, for instance with Mercedes Benz I believe the UK is the fourth largest market in the world - and one of those other markets is Germany.

You are aware that US has 25% tariffs on trucks, right? EU has 10% across the board; EU offered to drop it to zero if US was willing to do the same and Trump ran away scared at the idea of equal competition. This is of course excluding the fact that the companies that have actually suffered the most from Trump's threats etc. to date has been US car manufacturers who've closed/are closing multiple factories in USA atm.

Finally, I've just been reading about Ineos new vehicle which will be on sale in 2020 and which will probably be built in the UK, possibly at Bridgend in Wales. Autocar says of the project:

Ineos is targeting sales of around 25,000 units per year. The company has previously outlined its vision for the 4x4 to be sold globally, but particularly targeting the US, sub-Saharan Africa and Europe. Prices are set to stick closely to those of the outgoing [Land Rover] Defender, which was priced from £25,000. [/INDENT]

25k cars a year; you know that's a quarter of what Tesla sells of their 100k models. Not exactly a major auto manufacturer now is it? And that's assuming they actually go ahead in the end when a factory in EU would end up costing 10% less to sell.

fly_agaric

prawnsambo wrote: »

If the UK decide to drop tariffs on vehicles unilaterally, that's fine, but will have to do that for everyone including the EU.

AFAIR the WTO is not really functioning correctly at the moment.
Trump doesn't believe in it (not "America First" enough I suppose), and is trying to destroy it.

https://www.reuters.com/article/us-usa-trade-wto-judge/world-trades-top-court-close-to-breakdown-as-us-blocks-another-judge-idUSKCN1M621Y

So it is possible the UK would be able to get away with just ignoring WTO "rules" as it suits after exit IMO. They'll certainly have support of the US & Trump for that action (the man who has called the EU a "foe" of the US and praised Brexit). Of course the fact that a disorderly Brexit + the UK going rogue and completely burning bridges in that way with most of their former allies in the EU are actually possible shows how mad the world has gotten of late IMO.

Seth Brundle

blanch152 wrote: »

As I understand it, under WTO rules, the UK would have to operate the same tariffs for all countries, so the EU would not be under any disadvantage.

...but the UK would be!

prawnsambo

ThePanjandrum wrote: »

EU tariffs are 10% which will be the UK's WTO schedule figure. But the UK is a vast market for motor vehicles and can use these purchases as a bargaining chip with other countries under limited or full FTAs and can reduce the tariffs under such agreements to 0% if it wishes.

So just more unicorns then. You think these countries (who very likely already have FTAs with the EU) are going to cause problems for themselves with an even larger more vast market for motor vehicles? And all this can be done how quickly exactly?

Nody

blanch152 wrote: »

As I understand it, under WTO rules, the UK would have to operate the same tariffs for all countries, so the EU would not be under any disadvantage.

They can write a FTA/agreement but chances of them getting any FTA with EU that would allow that is pretty close to zero. Hence if UK wants to lose 50% of their export market to import cars 10% cheaper from Asia and USA they have cut of their leg because they had a minor itch.

fly_agaric wrote: »

AFAIR the WTO is not really functioning correctly at the moment.
Trump doesn't believe in it (not "America First" enough I suppose), and is trying to destroy it.

Basically Trump don't like the idea that he can't bully countries as he see fit and refuse to appoint judges to the court because god forbid a court that has ruled over 90% in US favor is not partial enough for them.

Anthracite

ThePanjandrum wrote: »

But I accept your superior knowledge, the German motor industry will not be concerned by that at all.

You don't have to accept my superior knowledge, the German motor industry is on record as valuing the integrity of the Single Market above the giving the UK free access (and having free access to the UK).

Anthracite

ThePanjandrum wrote: »

EU tariffs are 10% which will be the UK's WTO schedule figure. But the UK is a vast market for motor vehicles and can use these purchases as a bargaining chip with other countries under limited or full FTAs and can reduce the tariffs under such agreements to 0% if it wishes.

A vast market? The USA is a vast market. China is a vast market. The UK is a large market, like Italy, Germany, France, Spain, Poland...

First Up

If the UK car industry can't rely on the supply of components it depends on from suppliers across the EU, tariffs on finished cars won't be a problem because there won't be any finished cars to export.

cryptocurrency

JRM has caused quite a stir with his latest tweet. https://twitter.com/Jacob_Rees_Mogg/status/1080837722208636929

I have been quite shocked at how much abuse the man has got for that tweet and the strong opinions that the UK can't survive or won't survive without being in bed with the EU. So many people are showing serious dislike towards the UK that its a little disturbing. Who needs friends hey.

ancapailldorcha

Enough of the name calling please. Post deleted.