The loss of access to the single market would affect Ford Credit Europe (FCE) – Ford’s UK headquartered captive finance arm, the company has warned.
Giving written evidence to the Government’s Business, Energy and Industrial Strategy Committee’s inquiry into the implications of Brexit into the UK automotive sector, Ford warned it was worried FCE might lose access to the passporting regime which currently allows it to operate throughout the EU.
In its evidence, Ford wrote: “FCE’s sole purpose is to finance the sale of Ford motor vehicles and Ford cannot afford any kind of disruption to FCE’s continuity of financing.”
It added that FCE finances almost four in ten of Ford vehicles sold in the UK and recently opened a new headquarters in Manchester, serving eleven markets across Europe.
This is not the first time Ford has outlined its fears around losing access to the single market for its lending arm. In March, a spokesperson for Ford Credit told Motor Finance: “Ford Credit is conducting a study which may lead to potentially applying for a German banking license in addition to its UK license.”
The passporting issue for FCE was just one of a range of issues brought up by Ford, as well as other entities which presented evidence such as Honda Motor Europe and Vauxhall Motors.
Among issues Ford highlighted included loss of duty-free access to the European market, and a reversion to World Trade Organisation (WTO) Most Favoured Nation (MFN) tariffs, which it said would place a very significant cost on Ford in Britain and across Europe.
In its written feedback, the Society of Motor Manufacturers and Traders warned that import tariffs could push up the list price of cars imported to the UK from the EU by an average of £1,500 if brands and their retail networks were unable to absorb these additional costs.
It added that the UK automotive industry has benefitted hugely from being part of the EU’s common automotive regulatory system.