Bullying Britain over Brexit could cost German jobs and lead to ‘big trouble’ for the EU, a Porsche executive warned yesterday.
Bosses at the German sports car maker have told the EU’s free trade commissioner that punishing the UK for leaving the bloc could backfire.
They said imposing tariffs and customs barriers would make German cars more expensive to export to the highly profitable UK market.
Bosses at the German sports car maker have told the EU’s free trade commissioner that punishing the UK for leaving the bloc could backfire (left-right: Oliver Blume and Lutz Meschke)
In a public intervention that breaks ranks with many other European businesses, Lutz Meschke, Porsche’s executive board deputy chairman and finance chief, said it was in the EU’s interests to forge a free trade deal with Britain.
He revealed he had voiced his company’s concerns to European Commissioner Elzbieta Bienkowska, who is responsible for internal markets, industry, free trade and entrepreneurship.
Mr Meschke said: ‘If the EU decides to stay completely negative in the negotiations, it will be very difficult to keep the price level for imports of goods to the UK at a stable level. You will have customs tariffs. It will make things difficult.’
In a public intervention that breaks ranks with many other European businesses, Lutz Meschke (right), Porsche’s executive board deputy chairman and finance chief, said it was in the EU’s interests to forge a free trade deal with Britain
He added: ‘Imposed trade tariffs will push up the price, weaken demand for Porsche cars in the UK, and ultimately put German jobs at risk. It’s an absolute must that both sides must reach a good compromise.’
The UK is Porsche’s fourth largest market after China, the US and Germany. Last year it sold 14,051 cars in the UK, up 7 per cent on 2016. Cars sold in Britain also have some of the highest mark-ups as customers add many extras. The firm’s stance will be a boost to British businesses, many of which have argued that European companies would also be hit if the EU imposed tight imports and export controls after Brexit.
The UK is a major importer of German goods, with £69.5billion flowing into the country in 2017. By contrast Germany imported around 50 per cent less – some £37.3billion goods – from the UK.
Mr Meschke (right) said: ‘If the EU decides to stay completely negative in the negotiations, it will be very difficult to keep the price level for imports of goods to the UK at a stable level. You will have customs tariffs. It will make things difficult’
Brexiteers argue that countries such as Germany need UK trade and that, despite EU rhetoric, businesses do not want to be hit by tariffs. Of the EU’s aggressive stance on Brexit talks, Mr Meschke said: ‘Towards the public, they have to create the image of being a tough negotiator. I hope they will find a good compromise and do not treat each other as enemies.’
Porsche would like tariff-free trade and a relationship similar to that between the EU and Norway. ‘Free trade is a must for developing industry,’ Mr Meschke added. ‘If we don’t have free trade conditions in future we will have big trouble … I talked to the European Union Commissioner about this. We can’t create a new trade war … We don’t want a position where punishing Britain will cost German and European jobs.’
This week the German Association of the Automotive Industry, representing firms such as BMW and Porsche’s parent company Volkswagen, said regulations flowing from anything other than a comprehensive Brexit deal would ‘significantly burden’ trade with the UK. Individual companies have been less forthcoming about speaking out, although BMW has said that its British-based operations will remain crucial after Brexit.