The European Union's proposed "Made in Europe" legislation, formally known as the Industrial Accelerator Act, could lead to higher prices for new cars in the UK. The rules, designed to limit China's growing influence in European industry, may require car manufacturers to source at least 70% of the total value and components of new vehicles from within the bloc.
Industry Warns of Unnecessary Barriers
Sue Robinson, chief executive of the National Franchised Dealers Association (NFDA), warned that the new rules risked creating "unnecessary barriers." She highlighted the close connection between UK and European automotive markets, stating, "The UK and European automotive markets are closely connected, so it is important that British businesses are not put at a disadvantage."
Robinson added, "We support efforts to secure full UK access to these measures and avoid unnecessary barriers that could ultimately affect retailers, vehicle choice and affordability."
Political and Diplomatic Reactions
A Labour Party government source expressed willingness to negotiate, saying, "We are willing to negotiate on the things that matter to them, but they have to be able to negotiate the thing that matters to us. Made in Europe should be on the table, definitely."
One EU diplomat noted substantial backing among key member states for including the UK in the initiative, though not all agreed. "The problem is the benefits are seen as asymmetrical," the diplomat said. "The UK gets more out of it than the EU."
Impact on Production and Consumers
The Society of Motor Manufacturers and Traders (SMMT) warned that excluding the UK from these incentives would put the sector at a major disadvantage. The organisation stated, "Preventing UK access to these incentives would put the sector at a major disadvantage, impacting production volumes which, in turn, would severely constrain EU supply chain demand and mean reduced choice and higher prices for consumers."
The Department for Transport has previously expressed "concerns about the EU's proposed 'Made in Europe' measures," admitting they "could have a detrimental impact on the UK automotive sector."
A government spokesperson said, "The UK is a close and trusted European partner, committed to our shared security and economic cooperation. We will continue to engage with the EU on Made in Europe and work together, as like-minded partners, to boost growth and open up trade."
