Germany issued shock Brexit WARNING: 14,000 jobs at risk in £3.36 billion HEADACHE
A study by accounting firm Deloitte predicted economic turmoil for Germany’s famed car industry.
It found a hard Brexit involving tariffs and a lasting devaluation of the pound could cause thousands of job losses.
The study, published today, said job losses would be particularly high if Britain loses access to the single market and customs union.
Thomas Schiller of Deloitte said: “Trade barriers emerging in the course of Brexit such as tariffs or regulation would considerably harm supply chains and raise the costs for suppliers.”
Deloitte said 14,000 jobs at automotive suppliers could be lost with their sales also shrinking.
The introduction of WTO trade tariffs and a permanent devaluation of the pound could also lead to a severe drop in sales.
Around 770,000 fewer vehicles will be sold to Britain in 2019 compared to the expected figure if Britain remained in the EU, the report said.
The report said sales could be cut by £3.36 billion – a staggering amount sure to pose a headache to Berlin.
Germany is the largest exporter of car parts to the UK, with companies such as Continental and Robert Bosch providing nearly a fifth of all components used in UK-based car production.
Around 42,500 jobs in Germany depend on suppliers’ ties with Britain and German parts makers generated 16.9 billion euros in sales in 2016 from UK car production, the study by the global accounting firm showed.
It comes after it was revealed Germany will also face a £180 million bill for import and export declarations with Britain.
With Britain set to leave the single market, imports from the UK will need to be declared upon arrival in Germany. The same is true to exports to Britain after the country leaves the union in 2019.
Germany’s Finance Ministry said: “Even in the best case – a very far-reaching free trade agreement – there will be customs controls again between Great Britain and Germany.”
A government source said they expected 14 million registrations for exports and 2.7 million for imports.
Eric Schweitzer, president of the German Chamber of Commerce and Industry said he expected these registrations to cost €200 million (£178 million).
He said: “True free trade in goods exists only in the single market.
“Therefore after Brexit the cost of bilateral trade with Britain will definitely increase, whether with a free trade agreement or just with WTO rules.”
(Additional reporting by Monika Pallenberg.)