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UK auto industry foresees post-Brexit potential cooperation

Updated: 2020-02-24 13:20
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Invited guests view the new Rolls-Royce Phantom at an event in London, Britain. [Photo/Agencies]

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

"China's new car market went through exponential growth. It's the biggest new car market in the world," said Emma Butcher, SMMT's head of communications, in an interview with Xinhua.

Britain and the European Union 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," Butcher said.

She added if no agreement is reached between the two sides by the end of 2020, WTO rules would apply, under which car manufactures would 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," Butcher said, adding that the industry already operates a lean procedure making cutting more costs very difficult in the first place.

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 the 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 investment.

"It's a real opportunity for more dialogue, more networking to understand the different regulatory frameworks between UK and China," she said.

"I 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 premium and luxury British auto brands, she added.

Well-known British car brands investing in China include Aston Martin, Rolls-Royce, Bentley, McLaren and Jaguar Land Rover.

Butcher also praised China's opening-up measures in recent years. She noted the measures will provide easier access for British car manufacturers to enter the Chinese market and work on a more level playing field.

Reuters

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