9:51 am, June 25, 2019
SECURING a favourable Brexit deal must be the number-one priority of Britain’s next Prime Minister, the Society of Motor Manufacturers and Traders said today.
The call came as the trade body published a new report highlighting the importance of automotive trade to the UK economy and the high stakes of a ‘no deal’ Brexit.
The SMMT’s 2019 UK Automotive Trade Report calculates that delays to production caused by friction at the border could add costs of up to £50,000 a minute to the sector.
Leaving the EU without a deal would trigger the most seismic shift in trading conditions ever experienced by automotive, with billions of pounds of tariffs threatening to impact consumer choice and affordability.
The end to borderless trade could bring crippling disruption to the industry’s just-in-time operating model.
Delays to shipments of parts to production plants are measured in minutes, with every 60 seconds costing £50,000 in gross value added – amounting to some £70 million a day in a worst-case scenario.
Combined with WTO tariffs, which for the trade in passenger cars alone amount to £4.5 billion a year, this would deliver a knockout blow to the sector’s competitiveness, undermining a decade of extraordinary growth.
Addressing business leaders and government officials at the annual International Automotive Summit in London today, Mike Hawes, SMMT chief executive, said: ‘Automotive matters to UK trade and to the economy, and this report shows that, if the right choices are made, a bright future is possible.
‘However, ‘‘no deal’’ remains the clear and present danger. We are already seeing the consequences of uncertainty, the fear of no deal.
‘The next PM’s first job in office must be to secure a deal that maintains frictionless trade because, for our industry, ‘‘no deal’’ is not an option and we don’t have the luxury of time.’
Automotive is the UK’s single biggest exporter of goods, trading with some 160 countries worldwide, and accounting for more than 14 per cent of total exports. The sector is one of the country’s most valuable economic assets, directly employing 168,000 people, supporting communities and delivering an annual £18.6 billion to the public purse.
Leaving the EU without a deal would jeopardise this, hampering the government’s ambitions to boost global exports and GDP. Without automotive, the UK would lose its hard-won status as the world’s 10th biggest exporter of goods, falling to 14th place behind Belgium, Canada, Mexico and Russia.
The SMMT compiled a list of eight recommendations for the government and the automotive industry as it published its first UK Automotive Trade Report.
These highlighted the need to set a positive, modern, automotive-friendly trade agenda and the benefits of seeking new opportunities in key global markets.
MORE: Industry figures call for clarity as new car registrations drop again
MORE: UK car manufacturing plummets as Brexit shutdowns strike
MORE: Aston Martin boss says brand’s luxury cars may get cheaper in the event of a no-deal Brexit
