German car chief warns hard Brexit will be ‘mission impossible’ for UK and EU

Mr Wissmann highlighted the ’deep reciprocal dependency’ of the UK and German car industries

A hard Brexit preferred by Theresa May will be a “mission impossible” as the EU and the UK would face “massive negative effects” if Britain leaves the single market, the head of the German automobile industry association has warned.

In October, Matthias Wissman warned that the UK leaving the single market could force companies to move their business elsewhere. His comments marked the first time a senior figure in the German car industry publicly outlined the consequences from a change to Britain’s trading arrangements with the EU.

Writing in the Suddeutsche Zeitung yesterday, Mr Wissman highlighted the “deep reciprocal dependency” of the two countries’ automotive industries, and said both the UK and the EU should aim to keep Britain in the single market in upcoming Brexit negotiations.

British car production has boomed over the last five years, growing by a quarter to 1.6 million vehicles in 2015, with German brands accounting for 11 per cent of that figure. Some 57 per cent of the cars made in Britain are purchased by buyers in the rest of the EU. The next largest market is the US (12 per cent), followed by China (7 per cent).

Mr Wissmman said the EU should force Britain to pay into the Brussels budget and accept the resulting rules, including the free movement of people, which has been ruled out by Theresa May. “The hard Brexit preferred by Theresa May would have severe side effects,” he said.

“It remains the hope that in the upcoming exit process the realisation of the nearly insurmountable hurdles prevails. A hard Brexit is indeed a ‘mission impossible’... The aim of the talks must be: Britain should remain in the internal market and in the customs union, accept the basic freedoms and make a financial contribution to the EU budget, in return for unimpeded access to the internal market.”

The £70bn-a year British car industry has made the case for government backing as the UK leaves the EU at a summit earlier in December

Although the details of the talks were private, members of trade body the Society of Motor Manufacturers and Traders (SMMT), which hosted the summit, are understood to have pressed Brexit secretary David Davis on the importance of securing tariff-free access to European markets. The meeting came in the wake of the controversial “sweetheart” deal Nissan secured from the Government to keep investing in its giant Sunderland plant.

If Britain failed to conclude a free trade deal with the rest of the EU and was forced to fall back on basic World Trade Organisation rules, British car exporters could face tariffs of up to 10 per cent.

Additional reporting by PA