Three quarters of UK automotive businesses fear a ‘no-deal’ Brexit will threaten their future viability, according to a new member survey by the Society of Motor Manufacturers and Traders (SMMT).
The results highlight the “critical need” for a Brexit withdrawal deal and transition to prevent the industry falling off the cliff-edge on March 29 when the UK leaves its “largest and closest trading partner, the EU”.
Some 74.1% of companies with UK operations responding to the survey said that a ‘no-deal’ scenario would “damage their business”, with fewer than 9% foreseeing any positive impact.
More than half said their operations have already suffered as a result of uncertainty about future trading arrangements, and almost a third said they had postponed or cancelled UK investment decisions because of Brexit – with one in five having already lost business as a direct consequence.
According the group, the automotive industry is one of the UK’s most “valuable assets”, employing 856,000 people and delivering £20.2bn to the economy. Since 2010, car production alone has risen by a third, with 1.67 million cars leaving production lines in 2017 – 80% bound for export, most to the EU.
Mike Hawes, SMMT CEO, said: “Frictionless trade as part of the EU single market and customs union has driven the success of the UK automotive industry so the fact we are leaving is already painful, and already causing damage.
“Leaving without a deal would be catastrophic – plants will close; jobs will be lost. Leaving is not what we wanted, but we recognise that the withdrawal agreement has been hard-fought and, crucially, delivers a transition period which steps us back from the cliff-edge.
“We need a deal now, and we need an ambitious deal for the future that guarantees frictionless trade with our most important market – nothing else will do, and we urge all parties to remember what’s at stake.”
Tony Walker president and managing director of Toyota Motor Europe, added: “No deal is not an option. In the short term, crashing out of the EU would have immediate and devastating impacts, with border chaos disrupting the Just in Time basis on which our business depends.
“Disruption could last for weeks – even months. It is unimaginable that we could implement full WTO import and export procedures overnight. For the longer term, a ‘no-deal’ Brexit would harm our competitiveness, undermine sales and cost jobs… We need the certainty of a deal, not more uncertainty, and we need the smooth transition period based on current trading conditions.”