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The staff of high-end car-end car factories could lose their jobs unless the government intervenes with financial assistance such as the leave-up diets to compensate for the prices of Donald Trump, the automotive industry warned.
Mike Hawes, director general of the Society of Motor Manufacturers and Traders, said that the prices had a “severe, important and immediate” impact on luxury brands such as Aston Martin, Bentley, Jaguar Land Rover and McLaren who depend on rich American consumers.
The British automotive industry depends strongly on exports to Europe, but it is also exposed at the rate of 25% that the American president imposed on imports of all cars made abroad Because the United States is the largest market for high-end brands in the United Kingdom.
Hawes told the House of Commons' selective commercial committee that some of the most expensive car manufacturers depend on the United States for 30% to 50% of their exports.
Chef SMMT told deputies that people who bought luxury cars were sophisticated consumers and would not necessarily pay the additional costs for vehicles following prices.
“The hypothesis is that if you can afford £ 200,000 for a car, you can afford £ 250,000 for a car, but these individuals are clever, they can see what's going on,” he said.
“They see that their vehicle can potentially be 25% more expensive, so they will retain, they will stop, it is a discretionary expenditure … You will see the order books dry immediately.”
Hawes said that car manufacturers would try to put their existing inventory in the United States as quickly as possible, but it would be “weeks rather than months” before they should make difficult decisions even if layoffs would be a “last appeal”.
He told the deputies that it was essential for the United Kingdom to obtain a “very quickly” trade agreement with the United States which supported the automotive industry.
The alternative was that ministers offer a new “mechanism”, citing the type of leave scheme which was introduced during the coronavirus pandemic five years ago.
“There are a number of things you could look at, any way to support employment,” he said.
The alternatives for ministers could be to introduce national insurance or VAT vacation – or encourage more temporary flexibility of HM Revenue & Customs – for certain car manufacturers, he said.
Liam Byrne, the president of the business committee, said after the meeting: “The ministers have completely launched everything to conclude an American trade agreement to maintain this real and present danger – but hope is not a plan.
“We must be ready with a great line of daring lifestyle for our world-class car manufacturers: incentives to stimulate sales in the United Kingdom, a blitz to reduce energy costs and targeted support to keep our exporters in the race.”
JLR suspended shipments in the United States while Aston Martin said it hoped to transmit part of the tariff cost for consumers. People close to the company said that Aston Martin was expecting 30 million pounds sterling in raw benefit following American prices, avant-garde all the benefits that analysts have been waiting for the year.
According to the Institute for Public Policy Research, more than 25,000 direct car jobs in the United Kingdom could be threatened if exports to US Fall.
Even before the American prices, car manufacturers had trouble with the heavy investments they had made in electric vehicles and slow car sales in Europe. Last year, Ford said it would reduce 800 jobs in the United Kingdom, while the owner of Vauxhall Stellantis announced his intention to van factory In Luton, putting around 1,100 jobs in danger.
Meanwhile, Stephen Phipson, leader of the manufacturing sales group, Make UK, told the Committee that companies set up emergency plans to cope with the potential decline in trade caused by Trump prices.
Phipson said the sectors faced with the most difficult challenges following American prices were steel and cars.
“We do not know from one day to the next … if he will suspend, if he will change (the prices), it makes the planning of your investments extremely difficult,” he said.
He said he had supported ministers' efforts to conclude a trade agreement.
“Many manufacturers are developing temporary emergency plans hoping that in the next two months, we can have a certain sense and they do not have to make the next level.”
When Byrne said it sounded “like dismissed people”, Phipson said: “It would be the end result of a spectacular volume reduction, absolutely right, yes.”
