United Kingdom auto industry says no Brexit deal would cause permanent damage

The Society of Motor Manufacturers and Traders (SMMT) said in a statement that it was time to be pragmatic about what can be achieved in the time available and what the consequences would be if Britain left without a deal.

The UK automotive industry has today called on government to seek an interim arrangement with the EU that would maintain membership of the single market and customs union until a final agreement on a new relationship with the EU is negotiated and implemented. The SMMT has said that trade needs to be tariff-free and as frictionless as possible.

The UK and European Union automotive sectors are highly integrated, and Hawes warned that a bespoke deal - which would need to cover rules on tariff and non-tariff barriers, and regulatory and labour issues - could not be completed within five years.

Britain's departure from the European Union's customs union would ramp up costs for small and medium-sized auto part suppliers to such an extent that supply chains could seize up, a senior European executive at Honda said on Tuesday.

SMMT chief executive Mike Hawes said that United Kingdom automotive industry accepted Britain would be leaving the European Union, but raised doubts whether a final deal on a future relationship could be finalised and implemented by March 2019. "This would undermine our competitiveness and our ability to attract the investment that is critical to future growth".

Despite these increases, Britain's vehicle manufacturers still lag behind European counterparts like France and Germany, which use up to 60% domestic parts according to anecdotal reports. "We need to have arrangements where European Union content counts as United Kingdom and vice versa - that should also allow us to take advantage of free trade arrangements with 30-40 other countries that the European Union has".

The UK's exit from the European Union, along with its single market and customs union, has the potential to disrupt the worldwide supply chains relied on by manufacturers of complex equipment such as vehicles.

  • Zachary Reyes