‘No Brexit dividend’ for car industry, says motor trade organisation
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The trade group representing the automotive industry has delivered a stark, public warning to the government, stating that the sector is already severely suffering from Brexit uncertainty, with investment halving in the space of a year.
The Society of Motor Manufacturers and Traders (SMMT) announced that an estimated £347m had been invested in the British motor industry in the first half of 2018, compared with £647.4m in the first half of 2017.
The SMMT has credited this blow to uncertainty about the UK’s future after its separation from the EU and have called for the government to provide clarity on its plans for Brexit and to take action to safeguard jobs in the automotive sector.
“There is growing frustration in global boardrooms at the slow pace of negotiations,” said SMMT CEO Mike Hawes in a statement. “The current position, with conflicting messages and red lines, goes directly against the interests of the UK automotive sector which has thrived on single market and customs union membership.”
“There is no credible plan B for frictionless customs arrangements, nor is it realistic to expect that new trade deals can be agreed with the rest of the world that will replicate the immense value of trade with the EU.”
Hawes stated that the best model for customs and trade with the bloc was the one the country was departing from.
“There is no Brexit dividend for our industry, particularly in what is an increasingly hostile and protectionist global trading environment.”
The SMMT stated that the industry adds approximately £20bn in value to the British economy per year and that it was vital that it was protected. The minimum necessary, the SMMT said in a statement, was a Brexit deal that maintains customs union membership and single market benefits.
The SMMT’s warnings follow soon after last week’s warnings from aerospace giant Airbus that it could pull out of the UK entirely if the UK fails to secure a deal with the EU. This could result in thousands of job losses.
“Put simply, a no-deal scenario directly threatens Airbus’ future in the UK,” said Tom Williams, COO at Airbus Commercial Aircraft.
Recently, Paul Dreschsler, president of the Confederation of British Industry warned that there was “zero evidence” that any Brexit deal would be of any economic benefit to the UK, with the automotive industry facing the possibility of “becoming extinct”. Other large companies that have publicly issued Brexit warnings to the government – and in some cases announced plans to move operations abroad – include BMW, Siemens, Unilever, HSBC, Jaguar Land Rover and EasyJet.
Yesterday, business secretary Greg Clark said in the House of Commons that the warnings of Airbus and other companies regarding the possibility of a no-deal Brexit should be treated seriously.