Daimler could lose hundreds of millions of euros if UK leaves EU without trade deal

Daimler AG probably will lose hundreds of millions of euros if the UK leaves the European Union without a trade deal, and its chief executive officer is ruling out the idea of helping Prime Minister Boris Johnson rebuild Britain’s manufacturing base.

The Mercedes-Benz maker, which doesn’t have a car plant in the country, sees a financial impact in the "low three-digit" million-euro range in the event of a hard Brexit, CEO Ola Kallenius told the Frankfurt business media club ICFW on Monday. Cars would be subject to 10% tariffs, likely hurting demand for vehicles imported from Daimler’s factories in Germany and elsewhere in Europe.

A hard Brexit also is expected to put the viability of UK auto plants at risk. Daimler won’t build a U.K. factory because sales volumes in the country are too small, Kallenius said. If tariffs are implemented that are in line with World Trade Organization rules, it will cost the company money that won’t be available for other operations, he said.

The EU should prepare for negotiations with the U.S. as President Donald Trump and his challenger Joe Biden are both likely to address the country’s trade balance with the bloc after the election, Kallenius told reporters. The changing global trade environment might trigger adjustments in Daimler’s manufacturing footprint, he said, without elaborating. Daimler has built SUVs in Alabama since 1995 and opened a van factory two years ago in South Carolina.

Kallenius expects China to remain a key growth driver over the next decade and sees no indication that the recent market recovery in China is softening. Mercedes has recorded four consecutive months of double-digit sales growth, which the CEO called "almost too good to be true."

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
ZAR/USD
15.36
(-0.05)
ZAR/GBP
20.50
(-0.01)
ZAR/EUR
18.21
(-0.00)
ZAR/AUD
11.25
(-0.29)
ZAR/JPY
0.15
(-0.05)
Gold
1827.27
(-0.48)
Silver
23.44
(-0.35)
Platinum
933.99
(+0.87)
Brent Crude
45.51
(+2.15)
Palladium
2329.14
(+0.01)
All Share
57147.31
(+0.94)
Top 40
52478.55
(+1.08)
Financial 15
11337.90
(+0.62)
Industrial 25
79917.53
(+1.49)
Resource 10
51771.17
(+0.65)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
Yes, and I've gotten it.
22% - 310 votes
No, I did not.
51% - 733 votes
My landlord refused
28% - 396 votes
Vote