The UK car manufacturing industry is facing fresh challenges from the looming spectre of Brexit, after the Dutch Government warned that companies using UK-made parts will face fresh import tariffs. In an online Brexit Impact Scan tool, the Dutch government’s enterprise agency asks businesses: “Do you want to be less dependent on the British market? Consider focusing your activities on other countries.” Membership of the European Union gives countries the right to free transit of goods under free trade rules, meaning products can be moved from EU country to EU country without facing import or export tariffs. And while the Dutch service concedes business owners “know how important the UK market is for your sales and profits”, it warns that "After Brexit, parts made in the UK no longer count towards this minimum production in the European Union." This detail means goods using a high proportion of UK-manufactured parts will not count as EU products, and will be subject to trade tariffs when transported to other EU countries. • Motor industry calls for 'frictionless' Brexit While this advice is presently aimed at Dutch companies, it echoes warnings issued by the EU itself, which has advised that businesses should “treat any United Kingdom inputs as ‘non-originating’ when determining the EU preferential origin of their goods” after Brexit.

The Dutch Impact Scan also cautions: “You will also have to deal with customs formalities and possibly (longer) waiting times at the border. Take this into account in just-in-time delivery”. The car industry relies on a just-in-time manufacturing philosophy, which saves companies stockpiling expensive and unwieldy parts, ordering them instead only as they are needed. Sky News reports one leading car industry executive as saying "The hard Brexiteers have built a bomb under the UK automotive industry and the EU have lit it.” Sky also alleges major UK automotive suppliers are ceasing supply of UK-originated parts for cars being exported to countries covered by EU free trade areas. The UK car industry, which is responsible for 10 per cent of the country’s GDP, exports 53.9 per cent of cars to the EU, and employs almost a million people, has long voiced concern over the impact of Brexit. Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), previously warned border delays and trade tariffs could add up to 13 per cent to UK manufacturing costs. A group of cross-party MPs from the UK government’s Business, Energy and Industrial Strategy (BEIS) Committee, meanwhile, has advised it considers Brexit offers “no advantages” to the UK car industry. UK car industry faces 13% rise in costs after Brexit Manufacturing costs for new cars could rise by as much as 13 percent even if the UK achieves a tariff-free deal with the European Union post-Brexit, leaked Government documents have suggested.