Brexit Vote Ruined Mercedes-Benz’s Plans to Produce Cars at UK Factory

The vote for Brexit has made Mercedes-Benz cancel plans to move production to the UK. Previously, the German marque had been mulling over this before the 2016 EU referendum. Now the plans have been abandoned, according to the company’s boss Dieter Zetsche.

At the 2018 Paris Motor Show, Zetsche told attendees about Mercedes’ (now-ditched) plan to use Nissan’s factory in Sunderland for prouction. He had started negotiating with the Japanese automaker to set the plan in motion. This joint production project was an option before Brexit.

Back in 2010, an alliance was formed between Mercedes-Benz’s parent company Daimler, Nissan, and Renault. In early 2018, hundreds of workers were laid off by Nissan at its Sunderland plant due to the slump in demand for diesel-powered cars.

Warnings were issued by several other automakers at the Paris Motor Show, with Toyota being one of them. The Japanese company stated that its UK production – primarily at the Burnaston factory – would be halted temporarily if there’s a no-deal Brexit.

Toyota Europe’s CEO Johan van Zyl said he can’t predict how long the halt would last. Meanwhile, PSA Group’s Europe boss Maxime Picat warned that production would be disrupted if the EU is left with no deal.

According to Picat, PSA has been working hard to develop its UK business. It turned around Vauxhall and Opel, it’s also reinvesting in Luton and sharpening its sites’ competitiveness. “But there are limits”, he said. If the freedom of movement for people and goods is revoked, and custom barriers are created, then taking measures will be a must, ha added.

Picat explains that it’s impossible to produce cars separately for UK and Europe without hurting UK production. A number of automakers have called for Brexit negotiators to avoid a no-deal outcome, fearing that such a pullout would harm investment and production in the market.

In a recent statement, BMW said it’s ready with a plan to close its Mini factory in Oxford for at least a month on the day of Brexit. This will be part of the company’s effort to lessen the possible disruption caused by a no-deal Brexit.

Meanwhile, Honda anticipates tens of millions of pounds in losses, while Jaguar Land Rover has moved staff at its Castle Bromwich Assembly to a three-day week due to “headwinds impacting the car industry”.

Previously, Jaguar’s CEO Ralf Speth has warned that a no-deal Brexit would put tens of thousands of jobs in Britain’s car industry at risk. In addition, Speth doesn’t know if Jaguar factories will be able to operate after 29 March next year. Production halt could cause a loss of £60 million a day.

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