A ‘NO-DEAL’ Brexit must be ruled out now to avoid damaging one of the EU’s most valuable economic assets, the Society of Motor Manufacturers and Traders warns today.
Time is running out, and negotiators on both sides of the Channel must prioritise the agreement of terms for a managed withdrawal and ‘status quo’ transition as soon as possible. ‘No-deal’ would undermine the industry’s ability to operate and cannot be an option, says the SMMT.
The UK trade body will today meet with EU representatives in Brussels to highlight the economic importance of the integrated European automotive industry and set out the repercussions for businesses, economies and jobs if a deal cannot be struck.
New SMMT analysis suggests that no-deal and the resulting tariffs on light vehicles alone would add £5 billion to the collective EU-UK auto trade bill.
If passed directly on to consumers, import tariffs would push up the cost of UK-built cars sold in the EU by an average of £2,700, and that of light commercial vehicles by £2,000 – affecting demand, profitability and jobs.
Similarly, UK buyers of a car or van from the EU would be faced with £1,500 and £1,700 increases if manufacturers and their dealer networks were unable to absorb these additional costs.
The automotive sector is one of Europe’s most valuable economic assets, employing 13.3 million people and representing 6.8 per cent of EU GDP. UK Automotive is a key component of this success.
Mike Hawes, chief executive of the SMMT, pictured, said: ‘Tariffs alone should be enough to focus minds on sealing a withdrawal agreement between the EU and UK but the potential impact of ‘‘no-deal’’ means the stakes for the automotive sector are far higher.
‘Without a deal, there can be no transition period and the complex issues surrounding tariffs and trade, customs, regulation and access to talent will remain unresolved.
‘Our industry is deeply integrated across both sides of the Channel so we look to negotiators to recognise the needs of the whole European automotive industry and act swiftly to avoid disruption and damage to one of our most valuable shared economic assets.’