By Scott Wright

ALLIED Vehicles has revealed it has explored the possibility of manufacturing within the European Union (EU) as part of its Brexit preparations.

The Glasgow-based maker of wheelchair-accessible taxis and and mobility vehicles has declared it will look to assemble cars on the European mainland if Brexit results in “punitive” tariffs.

It reveals the plans in accounts filed at Companies House on January 31, the day the UK formally left the European Union (EU). Political attention has since shifted to the build-up to trade talks between the UK and the EU, due to begin next month, which could still result in a no-deal divorce if agreement is not reach before the end of the year – meaning trade tariffs are still a realistic prospect.

Allied, which employs more than 700 people at its sprawling site in North Glasgow, states Europe is a growing market but warns it may have to change its strategy in order to fulfil that potential.

Its accounts show that sales in the EU (not including the UK) increased to £5.5m in the year to April from £3.2m the previous time, as turnover overall climbed by 8.6% to £150.4m.

“Our international division, selling wheelchair accessible vehicles predominantly into Europe, has seen growth of 36 per cent,” the directors write in the accounts.

“We see significant future growth in this area, in a market which is not as mature as the UK market, and barring any Brexit tariff issues, we will continue to expand. Should any tariff issues because punitive, we will look to assemble vehicles in the eurozone, and we have already undertaken considerable research in this area.

“The Euro exchange rate has continued to work in our favour with our European customers.”

Speaking to The Herald, Gerry Facenna, chief executive of the family-run business, said Poland was the most likely location for a European base. This is partly because of the work ethic he would expect from its workforce, which he said is evident from the numerous Poles Allied employs in Glasgow.

However, Mr Facenna hopes the investment will not be required, and that “common sense” would prevail in talks between the UK and EU. He highlighted the importance for the UK operations of car manufacturers such as BMW to retain access to their “second-biggest market”.

With only five per cent of the firm’s sales generated in Europe, he added it remains a small part of the Allied business overall. The company sells wheelchair accessible cars in Germany, France, Italy, Spain, Sweden and Belgium.

The accounts show profits dipped to £3.96m from £5.47 million, with directors citing the impact of a previously-reported loss of a major contract. Mr Facenna said missing out on the Motability deal was “one of those things” but noted the company would bid again when the contract comes up for renewal next year.

And the company highlights in the accounts its success in building a new hire business, under which it rents wheelchair accessible vehicles to retail and corporate customers. Bosses noted the new division had contributed to its turnover growth during the year, “albeit at relatively low margins”.

“Overall unit volumes increased by 5.2% in the year, with taxi sales just edging ahead of last year,” the directors add. “Despite challenging market conditions, we have seen good growth in the year to date.”

Commenting on current trading, Mr Facenna said Allied was aiming for “even better” results this year. “We’re hoping for 10% growth,” he said.

Allied highlighted plans to transition in the coming years first to hybrid and then fully-electric vehicles, as concern mounts over climate change.

In December, Allied was named Scottish Family Business of the Year (large) at The Herald Scottish Family Business Awards. The Facenna family continue to back speedway club Glasgow Tigers and Ashfield Football Club, which share Ashfield Stadium.