UK auto industry foresees huge cooperation potential with China in post-Brexit

Five hundred automobiles manufactured by a Chinese carmaker are about to be shipped to the Netherlands at a dock of Lianyungang port, east China’s Jiangsu province, Feb. 3, 2020. Photo by Wang Chun, People’s Daily Online
Photo by Wang Chun, People’s Daily Online

by Xinhua writers Yu Jiaxin, Jin Jing

China is an important market and the British auto industry foresees big cooperation potential with China in the post-Brexit era, communications chief of the Society of Motor Manufacturers and Traders (SMMT) has said.

“Chinese new car market went through exponential growth. It’s the biggest new car market in the world,” Emma Butcher, head of communications of the SMMT, the trade association for Britain’s motor industry, told Xinhua in a recent interview.

Britain and the European Union (EU) are expected to start trade talks in March. Doubts still remain whether the trade talks could be wrapped up with a deal by the end of the transition period ending on Dec. 31.

“Hopefully we will get a free trade agreement. If not, the situation will be very serious,” said Butcher.

According to her, if no agreement is reached between the two sides by the end of 2020, WTO rules would apply, under which car manufactures will face a 10 percent tariff on finished vehicles and a tariff of up to 4.5 percent on components.

“There’s nothing you can do to mitigate against tariffs but to try to cut costs elsewhere,” she said, adding that the industry has already operates in a lean procedure, hence it’s very difficult to cut more costs anyway.

Since four out of five Britain-made cars are exported, with half going to the EU and two-thirds to nations with an EU trade deal, striking a deal with the EU is the priority for the car industry in Britain. However, as Britain’s third largest car export destination following the EU and the United States, China is also a highly attractive market with huge potential.

In June 2019, the SMMT signed a cooperation agreement with China Association of Automobile Manufacturers, which facilitates exchanges of information about market trends, business opportunities and trade between the two countries.

Butcher spoke highly of the mutual cooperation, noting that both sides are doing a lot more work together in terms of innovation, collaboration on projects and helping build investment.

“It’s a real opportunity for more dialogues, more networking to understand the different regulatory frameworks between UK and China,” she said, “hope it’s the beginning of something very special.”

In Butcher’s eyes, the move to electrification and zero emissions is an aspiration shared both by Britain and China. Britain has the expertise for innovation and engineering while China is an important manufacturing hub and sales market, she said.

China is also a very important market for the premium and luxury British auto brands, she added.

There are already some famous British car brands investing in China, including Aston Martin, Rolls Royce, Bentley, McLaren and Jaguar Land Rover, which Chinese customers are attracted to.

Butcher also welcomed China’s opening-up measures in recent years, noting that it will provide easier access for British car manufactures to enter the Chinese market and work on a more level playing field.

“You’ve seen a lot of investment already going to China from UK manufacturers, and you will see more in the coming years obviously,” she said. Enditem

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