The basic problem is that technology has evolved it has become more and more complex. So economies of scale are required to keep costs down. So parts of any car are made in factories all over Europe and abroad and then assembled in one location. This isn't a problem so long as they are basically being manufactured within one very large market and customs union.

After Brexit, if the UK leaves the Single Market and Customs Union,  there will have to be customs checks to ensure components are within specifications for quality/safety and comply with rules of origin. Tariffs may also apply. Either way costs are increased and Just-in-time become problematic.

The UK market and manufacturing base, on it's own, simply isn't big enough any more to sustain a major manufacturing industry like cars. So only small, simple, hand built, or specialised vehicles may be sustainable.

Same goes for aero-space where Airbus wings are manufactured in the UK. Which is more likely: that Airbus manufacturing is concentrated/consolidated in the UK or the EU?

The worst thing, from the UK perspective, is that it is all the advanced, high value stuff that will be effected most.

Index of Frank's Diaries

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