Under European rules, cars authorised for sale in one EU country may be sold across the union. When the UK leaves the EU, the Vehicle Certification Agency (VCA) will lose its ability to provide type approval for the rest of Europe, raising questions over the agency's future.
Documents released by the European commission state that "the United Kingdom approval authority will cease to be an EU type approval authority.
"As a result, it will not be possible as from the withdrawal date [March 30, 2019] for a manufacturer to place on the Union market motor vehicles accompanied by a certificate of conformity referring to a type approval granted by the United Kingdom approval authority."
The change could spell the end of the VCA, which finances itself by charging companies to gain type approval. It's not necessarily a death knell for UK manufacturing, though, as cars do not have to be certificated in the country they are built in.
For example, Mini models are mainly built at Oxford, but gain type approval in Germany. Skoda, despite being a Czech brand with operations in the Czech Republic and Slovakia, gains its type approval in the UK. Other brands that use the VCA include Jaguar, Toyota, Nissan, Honda, Peugeot and Citroen.
While the commission said existing certificates would remain in place, it stated clearly that the VCA would be unable to issue new type approval after the Brexit date.
In the wake of the news, several brands are said to be searching for other type approval offices. Three are confirmed to be in discussion with other European operators, while two others are considering leaving.
A spokesperson for the Department for Transport, which runs the VCA, said: "The Vehicle Certification Agency is internationally recognised and respected, and we are confident it will remain one of the world's leading type approval authorities after we leave the European Union.
"We are committed to securing the best deal for Britain, and will work hard to ensure the UK motor industry and authorities continue to thrive following EU exit."