March 19, 2018 / 4:23 PM / a month ago

Carmakers' group warns of post-Brexit customs, approvals mess

BRUSSELS (Reuters) - European carmakers said they want Britain and the European Union to establish urgently how vehicle approvals, environmental targets and customs will work after Brexit to avert disastrous consequences for the automotive sector.

Union flags are painted onto car shaped keyrings for sale in London, Britain, Thursday December 17, 2015. REUTERS/Luke MacGregor

European car manufacturers association ACEA, representing 15 vehicle makers with plants in Europe, released a paper on Monday highlighting three principal areas of concern, all of which could raise costs or disrupt tightly linked supply chains.

ACEA officials told a news conference that members were concerned about the certificate of conformity known as a “type approval” granted to vehicle types, which is currently issued by authorities in one EU country and valid for the bloc as a whole.

They asked whether the hundreds of such type approvals already granted by EU authorities would still be valid in Britain and vice versa.

“Without this legal continuity there will be chaos in the market place. It could even lead to blocked exports on both sides of the Channel,” said ACEA secretary general Erik Jonnaert.

Britain and the EU agreed on Monday to a transition period to avoid a “cliff edge” Brexit next year but large areas of their future regulatory relationship remain to be settled, including for the motor industry which moves large numbers of components and completed vehicles back and forward over the Channel.

ACEA urged the EU and Britain to accept mutual recognition for past and future type approvals. Otherwise, carmakers could face costs of about 450,000 to 600,000 euros ($552,600-$737,800) per model to duplicate approvals.

An anti-Brexit demonstrator waves EU and Union flags opposite the Houses of Parliament in London, Britain, March 19, 2018. REUTERS/Hannah McKay

The car body also encouraged both sides to agree simplified customs procedures and ensure that authorities were able to carry out necessary checks as rapidly as possible.

Even without possible duties, ACEA said customs formalities could add 100-150 euros to the cost per vehicle.

“Any new customs checks as a result of Brexit would have a cost and reduce productivity, maybe resulting in production even being stopped in severe cases,” Jonnaert said.

ACEA is also concerned by EU rules laying down the average carbon dioxide emissions of new cars sold in 2021 at 95 grams per kilometer. Carmakers, they say, are geared to meeting this target for the EU, including Britain.

However, if Britain were removed from the calculations, this would make it more difficult for the auto industry because Britain has a higher proportion of hybrid and electric vehicles.

Jonnaert said the European Commission, which is leading Brexit negotiations for the EU, had not yet been willing to discuss these issues. “We hear they are working on it and prefer not to engage right now,” he said.

($1 = 0.8143 euros)

Reporting by Philip Blenkinsop; editing by David Stamp

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