One popular myth perpetuated by leading Brexit supporters is that the EU will be desperate to give the UK a good deal because "We are the fifth biggest economy!" and in particular that the UK buys so many German cars that VW, Mercedes and BMW would be each "making a phone call" to German Chancellor Angela Merkel to encourage her to pressure the other EU member states into giving the UK a favourable deal. Similar logic is applied to other EU-produced luxury goods, such as Italian prosecco. There are a number of problems with this assertion.

The UK doesn't buy that many German cars and the German car manufacturers have other important markets for their products.

The Germans don't run the EU and the EU has the interests of all its member states in mind (other member states being glad of the loss of competition from the UK).

Economic production in a country doesn't necessarily determine that country's government policy - if it did, we wouldn't have Brexit.

The size of the UK economy in GDP terms reflects the amount we produce, not the amount we buy. The amount a country buys is more determined by its population and purchasing potential is what is of interest to the other party in a prospective trade deal rather than what a potential trading partner has to sell. Besides which, other countries know full well that the UK's economy has grown to the level it has on the back of European integration which we are attempting to throw away through Brexit.

The belief that the UK's status as an important market for German cars assumes that sales of German cars in the UK would decline sharply if we were not given a generous post-Brexit deal. But sales of German cars, as a luxury/premium item seen by many as status symbols, would not drop significantly because UK customers for them would continue buying them and accept the increase in price.

Car manufacture in Europe is done on the basis of individual components being manufactured in different countries and then brought together for assembly on a just-in-time basis (Nissan at Sunderland has a supply chain stretching across some 24 different countries and Mini crankshafts cross the English Channel multiple times before they end up in a finished car sold to a consumer). It is the only way that European manufacturers can compete with giant Chinese "industrial cities" and requires legal structures such as the EU Single Market and Customs Union. The German car manufacturers value these EU institutions more than they do their sales to the UK (which are not going to completely dry up) and have openly stated they are not going to assist the UK by lobbying for a favourable deal.

 The UK doesn't buy that many German cars


BMW sales by country 2017 small  BMW sales by country 2018 small 

The two charts above document BMW car sales by country in 2017 and 2018. In each case, the UK accounts for a shade under 10% of sales - not insignificant but only the fourth largest market. A similar story is seen for Mercedes-Benz sales. Click on any chart for an enlargement.

mercedes benz cars small

Pin It