LONDON -- Bentley said free trade with Europe not the United States was its priority as Britain negotiates its new relationship with the European Union, and worse terms could force it to do more work on its UK-made cars abroad.
Britain formally left the EU on Jan. 31, but little will change in its relationship with the bloc this year and a new partnership will not come into force until 2021.
While the government views a free trade deal with the U.S. as a prize, the car industry fears Brexit could lead to delays, tariffs and new paperwork with the EU, its biggest export market.
"As a luxury player with 24 percent of our sales in the EU and 90 percent of our parts purchases..., it would help us greatly if we didn't have to pay more for them or get less margin back for the products that we finish and send," CEO Adrian Hallmark told Reuters.
"When we look at the current model, where we just bring in built bodies and then do everything else here, it may be that we do more outside of the UK and then do the rest here. It may shift the balance but we're a long, long way from those discussions."
Although eradicating the 2.5 percent tariff on the 22 percent of cars it sells to the U.S. would be a boost, the automaker would lose out overall if the EU imposed the maximum 10 percent tariffs on the 24 percent of vehicles it sells in Europe and up to 4 percent on components, Hallmark said.
Aston Martin's boss Andy Palmer also told Reuters on Wednesday the company was focused on maintaining frictionless trade with the EU.
And McLaren Automotive said that if the EU imposed the highest tariff, the share of the company's roughly 4,700 sales which go to the EU could fall from 18 percent to as low as 12 percent.
"Our competitors coming into the UK would have the same tariffs," boss Mike Flewitt told Reuters.
Multiple parts
The exact effect of better terms with Washington but worse with Brussels would vary between companies.
Ford could be particularly affected as it imports all the cars it sells in Britain where it is the top-selling brand but makes nearly 1.1 million engines that are shipped to several countries, risking delays and charges.
PSA Group is also set to make an investment decision this year on whether to keep open its Ellesmere Port car plant and its boss suggested the company could seek compensation.
But the head of its British brand has previously said Brexit could allow it to grow its share and automakers may weigh up whether building in Britain for domestic buyers, rather than export, gives a competitive advantage.
Nissan, which was encouraged to set up in Britain as a gateway to the continent, has said its entire business in Europe would be unsustainable if high tariffs are imposed.
"It makes no sense. Who wins if you put a tariff on?" said Flewitt.
