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‘No-deal’ Brexit could bring irreversible damage to UK car industry

The UK automotive industry is urging government to ensure a no-deal Brexit is taken off the table as it continues to warn that such a scenario would be “catastrophic” for the car sector.

Astra production line at Ellesmere Port

Research by LMC suggests a no-deal Brexit could make it hard for carmakers to justify having UK plants

Speaking after last night’s vote saw MPs decisively reject Theresa May’s Brexit deal, Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), reiterated the industry’s concerns that a no-deal Brexit would risk destroying the UK car sector.

Research published two months ago by the SMMT has found that almost seven in 10 (68.5%) carmakers with operations in the UK said their profitability would be negatively affected by a no-deal Brexit, with 53.9% concerned about their ability to secure new overseas business and a similar number worried about maintaining investment in their UK operations. A further half said a no-deal scenario would undermine their ability to maintain their existing workforce.

Fewer than one in 10 (9%) of respondents said they could see any positive impact from a no-deal Brexit.

Speaking at the time, Tony Walker, SMMT president and managing director, Toyota Motor Europe – London Office, said: “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. For the longer term, a ‘no-deal’ Brexit would harm our competitiveness, undermine sales and cost jobs.”

And research by LMC has found that a no-deal Brexit could cost the UK automobile market some £9bn in annual revenue while making it hard for carmakers to justify having UK plants.

The SMMT is now urging all sides in Parliament to “work together to find a way forward and put the necessary mechanisms in place to prevent this happening and explore alternatives that protect our future”.

Mike Hawes added: “Leaving the EU, our biggest and most important trading partner, without a deal and without a transition period to cushion the blow would put this sector and jobs at immediate risk. ‘No deal’ must be avoided at all costs. Business needs certainty so we now need politicians to do everything to prevent irreversible damage to this vital sector.”

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Natalie Middleton

Natalie has worked as a fleet journalist for nearly 20 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day.