The government must move now to rule out a no-deal Brexit, which would cost billions of pounds to the automotive industry, according to the Society of Motor Manufacturers and Traders (SMMT).
According to SMMT analysis, a no-deal Brexit arrangement would add a significant amount onto the EU-UK trade bill.
A no-deal and the resulting tariffs on light vehicles alone would add £5 billion to the bill, affecting businesses, the economy and quite possibly jobs too.
The UK is the EU’s second largest car market, worth £29 billion to the EU manufacturers every single year, and it is the fourth largest car manufacturing nation; it supports more than 850,000 jobs and is responsible for 11% of EU auto manufacturing R&D spend.
The integrated nature of EU-wide industry has been fundamental to this success, maximising the benefits of the single market and customs union to reduce costs, improve quality and embrace innovation.
And damaging this deeply integrated trading relationship will have serious repercussions for the automotive industry, if it is not replaced with a withdrawal agreement that secures the trading arrangement for years to come.
Mike Hawes said: “Tariffs alone should be enough to focus minds on sealing a withdrawal agreement between the EU and UK but the potential impact of ‘no-deal’ means the stakes for the automotive sector are far higher.
“Without a deal, there can be no transition period and the complex issues surrounding tariffs and trade, customs, regulation and access to talent will remain unresolved.
“Our industry is deeply integrated across both sides of the Channel so we look to negotiators to recognise the needs of the whole European automotive industry and act swiftly to avoid disruption and damage to one of our most valuable shared economic assets.”
Clarity around the no-deal Brexit scenario has been called for in the past from a number of industries, and now a key organisation in automotive has laid its cards firmly on the table to ensure the future success in trading and for the economy.