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Brexit no-deal could stop Aston Martin production

Vehicle Certification Agency (VCA) approval, which is valid in the EU, is necessary for all new cars in the UK.

If no UK-EU deal is struck, that validity would no longer exist for new cars from March 2019.

Aston Martin have announced that it would result in the “semi-catastrophic” halting of production.

Mark Wilson, Aston Martin’s finance chief, said:

“We’re a British company. We produce our cars exclusively in Britain and will continue to do so,” he said.

“Recertifying to a new type of approval, be that federal US, Chinese or even retrospectively applying to use the EU approval, would mean us stopping our production.”

The only other solution would be a transitional arrangement in which Aston Martin could recertify under a non-VCA approval structure.

It’s not only Aston Martin who are airing concerns about a possible no-Brexit deal. Mike Hawes, Society for Motor Manufacturers and Traders chief executive, and Patrick Keating, Honda Motor Europe’s government affairs manager joined Mark Wilson at the Business Select Committee to express a desire for clarity on a transition deal with the EU.

With the service sector dominating the UK economy (contributing around 80% of the GDP) a cease in production by Aston Martin could see other vehicle manufacturers following suit which would be disastrous for the UK.

And a knock-on effect would occur as a result.

Other companies that rely on the vehicle manufacturing industry such as those that provide parts, storage warehouses and factories would suffer if vehicle manufacturing reduced within the UK.

Conversely, if the UK motor industry integrates into European supply, warehouse storage needs could increase because of new customs procedures and possible friction at the border.

Patrick Keating at Honda stated that for every 15 minute delay at customs, the cost to the company would be around £850,000 per year.

“We’re thinking about increasing the amount of warehousing and the amount of stock we would have to hold if friction entered the border,” he said. “March 2018 is where we would want clarity around transition.”

Source: http://www.bbc.co.uk/news/business-41983342

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