No-deal Brexit an ‘existential threat’ to UK car industry

UK carmakers warned Boris Johnson on Friday that a no-deal Brexit would be an “existential threat” to their industry, which employs hundreds of thousands and contributes £18.6bn to the British economy.

In a letter to the new prime minister, Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said these benefits would be threatened if the UK left the EU without an agreement.

“We are highly integrated with Europe, and a no-deal Brexit would result in huge tariff costs and disruption that would threaten production, as well as further undermining international investors’ confidence in the UK. We need a deal with the EU that secures frictionless and tariff free trade, he warned.

“A no-deal Brexit presents an existential threat to our industry,” he added.

“Above all, we must ensure the sector continues to enjoy — without interruption — preferential trade with critical markets around the world, including the EU,” he wrote.

Around 80 per cent of the cars made in the UK are exported, with the majority going to the EU. Two-thirds sold in countries with which the EU has a trade deal.

The trade group has already warned about the threat to British carmaking from Brexit.

Investment in new projects by carmakers and their suppliers in the UK has fallen by around 80 per cent in the past three years, according to SMMT figures, while carmaking fell 9 per cent in the first half of this year.

Several plants have announced closures, including Honda in Swindon and Ford’s engine site at Bridgend, while manufacturers including Nissan and Jaguar Land Rover have opted to build some models overseas.

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Mr Hawes said the industry has “fine margins” and is “highly competitive.”

In the letter, he also called for the government to invest in electric charging points as well as tax incentives to drive adoption of battery-powered cars as the industry moves away from the internal combustion engine in the coming decades.

While Britain has “first rate research and engineering facilities,” he wrote, the country lags rivals in building electric vehicles, with Jaguar making its first battery model in Austria and Honda closing its factory to focus on electric cars back in Japan.

Mr Hawes called on the government to support “the transition to zero emission vehicles by investing in charging infrastructure, increasing consumer incentives and securing a gigafactory in the UK to help retain a globally advanced supply chain”.



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