Aston Martin Lagonda cars parked outside the carmaker's factory in St Athan, Wales

UK car industry ‘has spent £735m on Brexit preparations’

Image credit: REUTERS/Rebecca Nade

Car manufacturers across the UK have spent more than £735m on preparations for Brexit, an industry body report has revealed.

The report by the Society of Motor Manufacturers and Traders (SMMT) said an excess of £235m has been spent in 2020 alone. It also issued a “last-chance plea” for a zero-tariff, zero-quota trade deal between the UK and the EU.

The SMMT said the sector is doing “everything in its control” to prepare for when the Brexit transition period ends on 31 December 2020, but warned that efforts are being hampered by a lack of clarity on future trading arrangements.

A no-deal scenario, or failure to achieve a “workable deal” for the automotive industry, would mean a £47bn hit over the next five years, the trade body stated. 

“As the UK-EU FTA (free trade agreement) negotiations enter the endgame, now is the time for both sides to deliver on promises to safeguard the automotive industry,” said Mike Hawes, chief executive, SMMT. “Securing a deal is absolutely critical, but it cannot be any deal.”

Approximately two-thirds (67 per cent) of companies across the sector have said they are doing everything they can to prepare for new processes from 1 January 2021, according to SMMT research.

Furthermore, around 70 per cent have secured new identification numbers for customs procedures, 60 per cent have spent “significantly” on stockpiling, while 52 per cent have employed customs agents, the report added.

Hawes said: “To work for UK automotive, it must deliver for UK products and that means securing the right terms and conditions that allow our exports – now and in the future – to be zero-tariff and zero-quota trade.

“A deal that failed to achieve this would be the equivalent to no deal at all, devastating jobs and slamming the brakes on the UK’s ambitions to be a world-leading manufacturer and market for electrified mobility and battery technologies.”

In August 2019, the SMMT warned about how a no-deal Brexit poses a serious threat to the UK car industry, with new car output down by almost 11 per cent in July of that year.

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