The Society of Motor Manufacturers and Traders has repeated its call for the UK government to secure a frictionless trading deal with the European Union to avoid the damage to the automotive sector that a ‘no deal Brexit’ would cause.
The SMMT said whoever comes to power following the General Election on 12 December should put the sector at the heart of its economic and trade policies and agree a Brexit deal to deliver on the UK’s green growth ambitions.
The industry’s representative body claimed that, according to new independent research it commissioned, the WTO (World Trade Organisation) tariffs that would be levied in the event of ‘no deal’ would decimate vehicle manufacturing in the UK with 1.5 million vehicles lost by 2024 at a cost of £42.7bn and annual output falling to just 1.0 million vehicles a year.
The SMMT said WTO tariffs on imported components and exported vehicles would add more than £3.2bn a year to UK automotive manufacturing costs, equivalent to almost 90% of the sector’s annual spend on R&D, a figure that could not be absorbed - forcing prices to rise and global demand to shrink at a time when additional investment in safer, cleaner and more intelligent mobility technology is essential.
Speaking at the SMMT’s 103rd Annual Dinner in London, chief executive Mike Hawes said: “UK Automotive’s needs are clear: frictionless trade free of tariffs, with regulatory alignment and continued access to talent. Detailed trade negotiations have yet to begin. They will be complex and they will take time. But a close trading relationship is essential to unlock investment so we can deliver our goals: cleaner air, zero carbon emissions, and the ability to go on building our products and marketing them globally.”