No deal Brexit threatens production at Aston Martin
Luxury sports car manufacturer Aston Martin has said it may have to halt production at its factories if the UK fails to agree a deal for exiting the EU.
Car manufacturers in the UK will have to have Vehicle Certification Agency (VCA) approval for their vehicles in order to continue to sell them within the EU.
If no agreement is reached then manufacturers may have to stop production until a new type of agreement is approved.
Mark Wilson, Aston Martin’s finance chief, told the Commons Business Select Committee that such a move would have a “semi-catastrophic effect” on the business.
He declined to say in public session how much such a delay in production would cost the Gaydon-based company but it would likely be considerable.
The lack of a deal is also likely to have major implications for the company’s investment in its supply chain.
Mr Wilson told MPs that 60% of the company’s components were sourced from the EU with the remainder coming from other areas.
He said Aston Martin was on a fast growth trajectory and as such, was investing more heavily.
Therefore, he said his own business – and the wider industry – needed clarity as soon as possible on what a post-Brexit deal would look like.
“60% of Aston Martin’s supply chain is in the EU with the balance in the UK. As we go through the ramp up now, investing in that supply chain is critical,” he said.
“We have to understand the direction of travel which is why we need clarity as early as possible.”
Mr Wilson said the company also had concerns about cars being delayed in European ports post Brexit.
“We have concerns about having a significant proportion of our outbound balance sheet sat in ports in Europe waiting to be ticked through,” he said.
“Every one of our cars is probably worth 20-times a Honda in terms of its overall price. So, one car delayed at Calais has me a lot more exercised that it would for Honda.
“Our issue is outbound. We would not be able to collect the revenues as quickly as we would like.
“The prospect of that tying up cash on my balance sheet is not appealing.”
The committee was convened to discuss the implications of Brexit on the car industry.
Mr Wilson was giving evidence alongside Mike Hawes, chief executive of the The Society for Motor Manufacturers and Traders, and Patrick Keating, Honda Motor Europe’s government affairs manager.
All three called for clarity on a transition deal with the EU.