The SMMT is making a last-chance plea for a zero-tariff and zero-quota trade deal as Brexit negotiations enter their final stages.
A new survey by the industry body out today (Nov 10) reveals that preparing for Brexit has cost the automotive sector more than £735m – with over £235m of that spent in 2020.
And it has calculated that if there’s no deal, or if an unworkable one is struck, it will cost the industry up to £47bn in lost trade in cars and vans over the next five years.
Just over two-thirds of companies (67 per cent) say they’re doing all they can to get ready for the new processes that will take effect as of January 1, 2021, the SMMT has found among its members.
Seventy per cent have secured Economic Operators Registration and Identification numbers, which they’ll need when exchanging information with customs administrations.
Meanwhile, three-fifths – 60 per cent – have spent significantly on stockpiling, while just over half – 52 per cent – are employing customs agents.
Disruption or delay to supply chains is high among concerns, but the SMMT says there are still significant gaps in the industry’s ability to plan.
It highlights a lack of clarity about the nature of the UK-EU’s future relationship, which is hampering efforts of almost nine in 10 – 86 per cent – firms to prepare.
The SMMT says companies simply can’t afford any supply chain delays, since the industry’s competitiveness is built on just-in-time deliveries,
As such, clarity on how key new customs systems such as the Goods Vehicle Movement Service and Permission to Progress process is vital, it emphasises.
It adds that even if the UK and EU do conclude a Free Trade Agreement (FTA), it’s still uncertain how businesses will prove origin or products.
If they can’t do that, they’ll be unable to benefit from preferential trading terms.
A phase-in period is also being sought, to give businesses time to adjust.
Failing to achieve these requirements would be the same as no deal, said the SMMT, and would compound the £27.5bn lost in car production and sales because of the coronavirus crisis.
SMMT chief executive Mike Hawes said: ‘As the UK-EU FTA negotiations enter the endgame, now is the time for both sides to deliver on promises to safeguard the automotive industry.
‘Securing a deal is absolutely critical but it cannot be any deal.
‘To work for UK Automotive, it must deliver for UK products, and that means securing the right terms and conditions that allow our exports – now and in the future – to be zero-tariff and zero-quota trade.
‘A deal that failed to achieve this would be the equivalent of no deal at all, devastating jobs and slamming the brakes on the UK’s ambitions to be a world-leading manufacturer and market for electrified mobility and battery technologies.’